Transactional Vs. Transactional Leadership Theory

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3.2 Transactional Leadership theory
According to Burns, a transactional leader was someone “who approaches followers with an eye to exchange one thing for another: jobs for votes, or subsidies to include for campaign contributions” (Klinsontorn, 2007, p.35). An example using Burns definition, it would be like a boss paying extra incentive for its employee who does the most sales. Thus, followers obtain rewards for job performance, while leaders benefit from the completion of tasks. Transactional leaders are good at traditional management functions such as planning and budgeting and generally focus on the impersonal aspects of job performance. The definition of Burns was expanded by Bass (1985). He said that a transactional leader must also
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Contingent Reward means to reward a follower that meets the expectation or punish for they fail to meet the expectation (Klinsontorn, 2007). For Bass (1985), the transactional leadership is contingent reinforcement. The leader and follower agree on what the follower needs to do to be rewarded or to avoid punishment. Should the agreed-upon performance is achieved; this dimension reinforces the effort to maintain the desired speed and accuracy of employee performance.
Active Management-by-exception occurs when the leader has a system for actively monitoring errors and gaps in expected performance and takes corrective action appropriately (Bass & Avolio, 1990).
Passive Management-by-exception occurs when the leader intervenes only when there is a gap between desired and actual performance levels. Accordingly, the leader pays attention to the subordinate only when corrective actions are necessary. Thus, there are no preventive actions or attempts by the leader to monitor or influence performance (Bass & Avolio, 1990).
4.1 Application of Transformational Leadership
Transformational leadership is very effective for corporate entrepreneurship success because it is responsible for motivating employees to go beyond ordinary expectations by appealing to their higher order needs and moral values. This will cause increased productivity, objectives being meet and high performance. Intellectual Stimulation, Individualized Consideration and Inspirational Motivation are dimensions of
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