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Posted on March 19th, 2013, by

Transformational leadership should be distinguished from transactional leadership. For Burns, transactional leadership is the process of motivating the followers by appealing to their selfish interests and the exchange of pay and status for their diligence (Hoyt & Blascovich, 2003). Transformational leadership is understood as the process in which leaders and followers raise one another to higher levels of morality and motivation (Barbuto, 2005).
Bass identified the transactional leader as the one who:
1) realizes what his/her followers want from their work, and watches that the followers get what they want if their work is done well;
2) exchanges rewards and promises of rewards for appropriate levels of effort;
3) is basing on self-interest of followers, if they are doing their job (Hoyt & Blascovich, 2003).
Thus, transactional forms of leadership behavior are related to early theoretical approaches. Transactional leaders clarify the roles of subordinates, show respect for them, initiate structure, reward and punish, as well as try to meet the social needs of the subordinates.
Transformational leadership is much more about the “mutual obligations”¯ between the leaders and their followers. Leaders try to completely “bound”¯ the subordinates with obligations and awaken their enthusiasm. They are trying to make subordinates appreciate the understanding of the key problems of the group or whole organization, and seek for the way to interest the subordinates by achievements, growth and development.

Generally, transactional leadership is determined by the following key factors (Hoyt & Blascovich, 2003):
”“ the interaction with the leader represents itself a profitable exchange, a deal with him/her (transaction); and the degree of recognition of someone as a leader is proportional to the number of different ways of rewarding and punishment the leader applies (in the form of salary, praise, recognition, etc.);
”“ such relationships with subordinates are focused on short-term goals, on preserving the status quo.
In contrast, transformational leader is oriented at creating long-term relationships with the subordinates, therefore, he/she is trying to convert (transform) them so that they would start aspiring for ultra-achievements. The goal of a transformational leader (sometimes called visionary) consists in the production and predicting changes in the organization: attitudes, values, objectives (Barbuto, 2005).

At the same time, researches tend to examine transformational leadership and transactional leadership as differing, but not mutually exclusive processes, as the leader may apply both types of leadership at different times and in different situations.

References
Barbuto, J.E. (2005). Motivation and Transactional, Charismatic, and Transformational Leadership: A Test of Antecedents. Journal of Leadership & Organizational Studies, 11 (4), pp. 26-40.
Hoyt, C.L., & Blascovich, J. (2003). Transformational and Transactional Leadership in Virtual and Physical Environments. Small Group Research, 34 (6), pp. 678-715.
Yukl, G. (2010). Leadership in Organizations (7th edn.). Pearson Prentice Hall.

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