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Style of leadership that is based on the setting of clear objectives and goals for the followers as well as the use of either punishments or rewards in order to encourage compliance with these goals.
All are good answers..
I would like to add a little bit;
Transactional leaders are good for a (one) 'transaction' which means they become leader in a specific area of leadership. If they are put in a different situation what they are used to, they may not prove themselves as leaders. They more of a broad vision managers. They get the job done but it's hard for them to bring cultural change. They are unable to 'TRANSFORM' a bad into good. I would say ' They are leader with limited skills in leadership, but they are beyond managers in skills and management.
On the other hand, 'TRANSFORMATIONAL' leaders are able to change situation to good. They are leaders at all times regardless of the situation. They usually focus on transform resources in favor to get results.
For example,
A transactional leader will assess the skill set of his/her area, and will replace incompatible people, and will develop those new ones.
When a transformational leader will get those incompatible ones and change them to the good.
Assumptions
People are motivated by reward and punishment.
Social systems work best with a clear chain of command.
When people have agreed to do a job, a part of the deal is that they cede all authority to their manager.
The prime purpose of a subordinate is to do what their manager tells them to do.
Style
The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders. Punishments are not always mentioned, but they are also well-understood and formal systems of discipline are usually in place.
The early stage of Transactional Leadership is in 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 (just as they are rewarded for succeeding).
The transactional leader often uses management by exception, working on the principle that if something is operating to defined (and hence expected) performance then it does not need attention. Exceptions to expectation require praise and reward for exceeding expectation, whilst some kind of corrective action is applied for performance below expectation.
Whereas Transformational Leadership has more of a 'selling' style, Transactional Leadership, once the contract is in place, takes a 'telling' style.
Discussion
Transactional leadership is based in contingency, in that reward or punishment is contingent upon performance.
Despite much research that highlights its limitations, Transactional Leadership is still a popular approach with many managers. Indeed, in the Leadership vs. Management spectrum, it is very much towards the management end of the scale.
The main limitation is the assumption of 'rational man', a person who is largely motivated by money and simple reward, and hence whose behavior is predictable. The underlying psychology is Behaviorism, including the Classical Conditioning of Pavlov and Skinner's Operant Conditioning. These theories are largely based on controlled laboratory experiments (often with animals) and ignore complex emotional factors and social values.
In practice, there is sufficient truth in Behaviorism to sustain Transactional approaches. This is reinforced by the supply-and-demand situation of much employment, coupled with the effects of deeper needs, as in Maslow's Hierarchy. When the demand for a skill outstrips the supply, then Transactional Leadership often is insufficient, and other approaches are more effective.
Transactional Leadership, also known as managerial leadership, focuses on the role of supervision, organization, and group performance; transactional leadership is a style of leadership in which the leader promotes compliance of his/her followers through both rewards and punishments. Unlike Transformational leadership, leaders using the transactional approach are not looking to change the future, they are looking to merely keep things the same. Leaders using transactional leadership as a model pay attention to followers' work in order to find faults and deviations. 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.
Style of leadership in which the leader identifies the needed change, creates a vision to guide the change through inspiration, and executes the changes needed.
CHANGE MAKER.
Transactional Leadership centers role of supervision, organization, and group performance. It is a method of leadership in which the leader promotes compliance of his/her followers through both rewards and punishments.
