A transactional leader is someone who values order and structure.

They are likely to

command military operations, manage large corporations, or lead international projects
that require rules and regulations to complete objectives on time or move people and
supplies in an organized way. Transactional leaders are not a good fit for places where
creativity and innovative ideas are valued.
Transactional leadership is most often compared to transformational leadership.
Transactional leadership depends on self-motivated people who work well in a
structured, directed environment. By contrast, transformational leadership seeks to
motivate and inspire workers, choosing to influence rather than direct others.

Transactional leadership definition

Transactional leadership focuses on results, conforms to the existing structure of an

organization and measures success according to that organization’s system of rewards
and penalties. Transactional leaders have formal authority and positions of
responsibility in an organization. This type of leader is responsible for maintaining
routine by managing individual performance and facilitating group performance.
This type of leader sets the criteria for their workers according to previously defined
requirements. Performance reviews are the most common way to judge employee
performance. Transactional, or managerial, leaders work best with employees who
know their jobs and are motivated by the reward-penalty system. The status quo of an
organization is maintained through transactional leadership.
Differences between transactional leadership and other leadership styles
Transactional leaders differ from charismatic and transformational leaders in both
structure and method. Charismatic leadership emphasizes influencing a group or
organization to make the world a better place. In transactional leadership, the emphasis
is on managing the performance of the individual and determining how well he or she
performs in a structured environment.
The difference between transactional leadership and transformational leadership is also
quite large. Simply put, transactional is a “telling” leadership style, and transformational
is a “selling” style. While the transactional approach features positive and negative
reinforcement, transformational leadership emphasizes motivation and inspiration.
Transactional leaders are reactive; transformational leaders are proactive. Transactional
leadership appeals to the self-interest of individuals, while the transformational style
prioritizes group progress.

Transactional leadership style

Here are some of the characteristics of transactional leaders:
 Focused on short-term goals
 Favor structured policies and procedures
  Thrive on following rules and doing things correctly
 Revel in efficiency
 Very left-brained
 Tend to be inflexible
 Opposed to change
Advantages and disadvantages of transactional leadership
Transactional leadership works well in organizations where structure is important.
Transactional leadership is not the right fit for organizations where initiative is
encouraged:
Transactional leadership pros:
 Rewards those who are motivated by self-interest to follow instructions
 Provides an unambiguous structure for large organizations, systems requiring
repetitive tasks and infinitely reproducible environments
 Achieves short-term goals quickly
 Rewards and penalties are clearly defined for workers
Transactional leadership cons:
 Rewards the worker on a practical level only, such as money or perks
 Creativity is limited since the goals and objectives are already set
 Does not reward personal initiative
Benefits of transactional leadership
There is definitely a place for transactional leadership in the world today. One of its best
uses is in multinational corporations where not all of the workers speak the same
language. Once the structure and the requirements are learned, it is easy for workers to
complete tasks successfully. This works because transactional leadership is simple to
learn and does not require extensive training. The transactional approach is easy to
understand and apply across much of an organization.
The military, policing organizations, and first responders use this style of leadership so
that all areas of the organization are consistent. It is also easier to apply in a crisis
situation, where everyone must know exactly what is required of them and how a task is
to be done under pressure.
To many people, money and perks are a powerful motivator. Many people need a job to
pay the bills. They have other obligations and distractions and would just as soon know
exactly how to do their job in order to keep it and reap the rewards.

What is Charismatic Leadership? Leading Through Personal

Conviction
The charismatic leadership style relies on the charm and persuasiveness of the leader.
Charismatic leaders are driven by their convictions and commitment to their cause.
Charismatic leaders also are sometimes called transformational leaders because they
share multiple similarities. Their main difference is focus and audience. Charismatic
leaders often try to make the status quo better, while transformational leaders focus on
transforming organizations into the leader’s vision.
Dr. Martin Luther King, Jr. was a charismatic leader who used powerful oratory, an
engaging personality, and unwavering commitment to positive change in the lives of
millions of people.
Read on

Charismatic leadership defined

What sets charismatic leaders apart is that they are “essentially very skilled
communicators, individuals who are both verbally eloquent, but also able to
communicate to followers on a deep, emotional level,” said Ronald E. Riggio, Ph.D.,
professor of leadership and organizational psychology at Claremont McKenna College,
in his Psychology Today article “What is Charisma and Charismatic Leadership?”
Charismatic leaders are often identified in times of crisis and exhibit exceptional
devotion to and expertise in their fields. They are often people with a clear vision in
business or politics and the ability to engage with a large audience.
A charismatic leadership definition is incomplete if it does not focus on the leader
personally. More than other popular leadership styles, charismatic leadership depends
on the personality and actions of the leader — not the process or structure.
Differences between charismatic leadership and other styles
“Charismatic leadership is a leadership style that is recognizable but may be perceived
with less tangibility than other leadership styles,” writes Mar Bell in “Charismatic
Leadership Case Study with Ronald Reagan as Exemplar.”
Charismatic leadership is similar to other styles. Both it and transformational leadership
rely on the ability of the leader to influence and inspire followers. Transformational and
charismatic leaders motivate the individual or those around them to be better and to
work for the greater good of an organization or society. Other similarities include:
 Leaders rally those around them in service of a common goal
 Initiative and boldness are encouraged
The differences between charismatic and transformational leadership styles lie primarily
in how the individual is viewed.
 The personal vision of a charismatic leader has a great deal of influence over his or
her audience
 Charismatic leaders speak about their moral compass or passion rather than an
existing method of doing business
Democratic and charismatic leaders compared
When compared to democratic leadership, similarities to the charismatic style include:
 They both place considerable responsibility on the leader
 Leaders guide employees, team members or volunteers in a particular direction
 There is often a spirit of collaboration
The differences between charismatic leadership and democratic leadership include:
 In democratic leadership, workers must have high-level skills in addition to the
desire to work
 Democratic leaders are highly rational and deliberate in their style
 Charismatic leaders appeal to the emotions of the audience
 In the charismatic leadership style, working toward a greater good is emphasized
Comparing autocratic and charismatic leadership
Likewise, charismatic and autocratic leadership styles share some traits. Both leaders
often increase employee productivity. The key difference: The charismatic leader
typically inspires employees to perform. The autocratic leader uses their authority to
demand high performance. The short-term result is identical, although the long-term
consequences may differ.
Charismatic leaders structure their organizations as they see fit. This is another
example of a crossover between charismatic and autocratic leadership styles. The
intensity of both styles may also generate early burnout of their leaders (and followers).
History of charismatic leadership
German sociologist Max Weber first published his book “The Three Types of Legitimate
Rule” in 1958. In it, he sets forth a tripartite classification of authority for organizations
and governments:
 Traditional
 Legal/rational
 Charismatic
Two forms of order: authority and norms
Weber suggests that there are two fundamental forms of order: norms and authority. In
organizations with authoritative order, people follow rules set by their
leader. Transactional and bureaucratic leadership styles fit into this form of order.
Institutions that use norms depend on the appeal of their mission and vision to inspire
allegiance in employees or followers. Charismatic leaders use norms to build a strong
emotional relationship with the people who work for them.

Examples of charismatic leadership

Charismatic leaders are from all walks of life. In addition to business, this leadership
style can be found in religious institutions and political and social movements.
Religious examples of charismatic leadership
Martin Luther King, Jr.
Born in 1929, Dr. King followed in the footsteps of his father as a Baptist minister. He
started his civil rights career as the leader of the bus boycott the night that Rosa Parks
was arrested in Montgomery, Alabama. Dr. King’s powerful speeches and belief in
peaceful protest put energy into the civil rights movement. In January 1957, he and
several others founded the Southern Christian Leadership Conference. In 1960, Dr.
King gained national notoriety for his arrest at a lunch counter sit-in, which came to the
attention of presidential candidate John F. Kennedy. He was soon released and went on
to have even greater influence in the fight for civil rights.
Martin Luther King, Jr.’s speeches ignited smaller movements for equal rights through
the American South and beyond. Dr. King is best known for the August 28, 1963, march
on Washington that drew more than 200,000 people. At that march, he delivered his
famous “I Have a Dream” speech. The following year, the Civil Rights Act of 1964 was
passed.
Mother Teresa
Born in Macedonia (now Yugoslavia) as Anjezë Gonxhe Bojaxhiu in 1910, Mother
Teresa was a Roman Catholic nun best known for her work with the poor. Mother
Teresa joined the Sisters of Loreto when she was 18 and moved to India in 1929. As a
novitiate, she was sent to Calcutta and taught at St. Mary’s School for Girls.
In 1946, Mother Teresa abandoned teaching to follow what she considered her calling,
founding the Missionaries of Charity to live and serve in the slums of Calcutta. Over the
course of the 1950s and ’60s, she established a leper colony, an orphanage, a nursing
home, a family clinic and a string of mobile clinics.
In 1971, she traveled to New York to open her first U.S.-based house of charity. In
1985, she spoke at the 40th anniversary of the United Nations General Assembly. By
the time of her death, the Missionaries of Charity numbered over 4,000 sisters with 610
foundations in 123 countries. Her inspiring, devout persona and devotion to a singular
idea make her a good example of a charismatic leader.

Transformational leadership

According to Bass,[6] transformational leadership encompasses several different aspects, including:

 Emphasizing intrinsic motivation and positive development of followers

 Raising awareness of moral standards
 Highlighting important priorities
 Fostering higher moral maturity in followers
 Creating an ethical climate (share values, high ethical standards)
 Encouraging followers to look beyond self-interests to the common good
 Promoting cooperation and harmony
 Using authentic, consistent means
 Using persuasive appeals based on reason
 Providing individual coaching and mentoring for followers
 Appealing to the ideals of followers
 Allowing freedom of choice for followers

Transformational leaders are described to hold positive

expectations for followers, believing that they can do their
best. As a result, they inspire, empower, and stimulate
followers to exceed normal levels of performance.
Transformational leaders also focus on and care about
followers and their personal needs and
development.[7]Transformational leaders fit well in leading
and working with complex work groups and organizations,
where beyond seeking an inspirational leader to help guide
them through an uncertain environment, followers are also
challenged and feel empowered; this nurtures them into
becoming loyal, high performers.
There are 4 components to transformational leadership, sometimes referred to as the 4 I's:

 Idealized Influence (II) – the leader serves as an ideal role model for followers; the leader
"walks the talk," and is admired for this. A transformational leader embodies the qualities that
he/she wants in his/her team. In this case, the followers see the leader as a model to emulate.
For the followers, it is easy to believe and trust in a transformational leader.
 Inspirational Motivation (IM) – Transformational leaders have the ability to inspire and motivate
followers through having a vision and presenting that vision. Combined, these first two I's are
what constitute the transformational leader's charisma. A transformational leader manages to
inspire the followers easily with clarity. The transformational leader convinces the followers with
simple and easy-to-understand words as well as with their own image.
 Individualized Consideration (IC) – Transformational leaders demonstrate genuine concern for
the needs and feelings of followers and help them self-actualize. This personal attention to each
follower assists in developing trust among the organization's members and their authority
figure(s). For example, the transformational leader can point out the problems of a member
working in a group. From this perspective, the leader can work towards training and developing
a follower who is having difficulties in a job. This is an important element because teams are
able to rely on and work together so decisions can be made more quickly, the transformational
leader increases their buy-in[8]
 Intellectual Stimulation (IS) – the leader challenges followers to be innovative and creative,
they encourage their followers to challenge the status quo. A common misunderstanding is that
transformational leaders are "soft," but the truth is that they constantly challenge followers to
higher levels of performance.[7]
Transformational leadership is said to have occurred when engagement in a group results in leaders
and followers raising one another to increased levels of motivation and morality.[6] It is not enough to
make the correct choice, but to make the moral choice. In simple words, a transformational leader is
not selfish and sees an opportunity of growth in others. Transformational leadership enhances
intellectual stimulation through employee training and development.
Transformational leaders do one thing tranactional leaders don't, which is going beyond self-
actualization. The importance of transcending self-interests is something lost sight of by those who
see that the ultimate in maturity of development is self-actualization. Bass. (1999).

Studies have shown that transformational leadership styles are associated with positive outcomes in
relation to other leadership styles. According to studies performed by Lowe, Kroeck, and
Sivasubramaniam, charisma (or Idealized Influence) was found to be a variable that was most
strongly related to leader effectiveness among MLQ scales.[11] Other studies show that
transformational leadership is positively associated with employee outcomes including commitment,
role clarity, and well-being.[12] However, the effectiveness of transformational leadership varies by the
situational contexts. For example, it can be more effective when applied to smaller, privately held
firms than complex organizations based on its outreach effect with members of the organization.[13]

Transactional leadership[edit]
In contrast to transformational leadership, transactional leadership styles focus on the use of
rewards and punishments in order to achieve compliance from followers. Transformational leaders
look towards changing the future to inspire followers and accomplish goals, whereas transactional
leaders seek to maintain the status quo, not aiming for progress. Transactional leaders frequently
get results from employees by using authority, while transformational leaders have a true vision for
their company, are able to inspire people, and are entirely committed to their work.
The MLQ does test for some transactional leadership elements – Contingent Reward
and Management-by-Exception – and the results for these elements are often compared to those for
the transformational elements tested by the MLQ. Studies have shown transformational leadership
practices lead to higher satisfaction with leader among followers and greater leader effectiveness,
while transactional practices lead to higher follower job satisfaction and leader job performance.[14]

What is transformational leadership?

Transformational leadership is a leadership style in which leaders encourage, inspire
and motivate employees to innovate and create change that will help grow and shape
the future success of the company. This is accomplished by setting an example at the
executive level through a strong sense of corporate culture, employee ownership and
independence in the workplace.

Transformational leaders inspire and motivate their workforce without micromanaging —

they trust trained employees to take authority over decisions in their assigned jobs. It’s a
management style that’s designed to give employees more room to be creative, look to
the future and find new solutions to old problems. Employees on the leadership track
will also be prepared to become transformational leaders themselves through
mentorship and training.
 [ Learn from your peers: Check out our State of the CIO 2018 report on the challenges and
concerns of CIOs today. | Find out whether you have what it takes to be a next-generation
CIO and how IT leaders transform their organizations for the digital era. | Get weekly insights
by signing up for our CIO Leader newsletter. ]

Transformational leadership model

The concept of transformational leadership started with James V. Downton in 1973 and
was expanded by James Burns in 1978. In 1985, researcher Bernard M. Bass further
expanded the concept to include ways for measuring the success of transformational
leadership. This model encourages leaders to demonstrate authentic, strong leadership
with the idea that employees will be inspired to follow suit.

While Bass’ model dates to the ’70s, it’s still an effective leadership style practiced
today — this style of authentic leadership never changes, just the environments it’s
used in. It’s applicable across every industry, but it’s especially vital to the fast-paced
tech industry where innovation and agility can make or break a company.

For a deeper look at the transformational leadership model, see "How to apply
transformational leadership at your company."

Transformational leadership characteristics

According to Bass, these are the hallmarks of a transformational leader that sets them
apart from other leadership styles. A transformational leader is someone who:

 Encourages the motivation and positive development of followers

 Exemplifies moral standards within the organization and encourages the same of others
 Fosters an ethical work environment with clear values, priorities and standards.
 Builds company culture by encouraging employees to move from an attitude of self-interest to a
mindset where they are working for the common good
 Holds an emphasis on authenticity, cooperation and open communication
 Provides coaching and mentoring but allowing employees to make decisions and take
ownership of tasks

For a look at how to draw out your transformational leadership qualities in your resume,
see "IT resume makeover: Highlighting transformational leadership."

[ Looking to upgrade your career in tech? This comprehensive online course teaches you how. ]

Transformational leadership in IT
Although the concept of transformational leadership can apply to every industry —
including healthcare, education and government agencies — it’s increasingly important
in IT as companies embrace digital transformation. Adapting to rapidly changing
technology requires innovation and strong leadership to stay ahead of the curve and to
remain competitive.

As leaders in IT, CIOs are responsible for setting the example as transformative leaders
— especially considering they’re largely responsible for digital transformation in the
business. Gartner reports that 40 percent of CIOs are leaders of digital transformation in
their organization, while 34 percent say they’re responsible for innovation. Inspiring and
motivating employees is an important puzzle piece when planning out digital
transformation, as success depends on everyone buying into and embracing growth
and change.

While there is certainly a growing need to keep an eye on the future — whether it’s
security, new technology or shifting platforms — not every part of IT will benefit from
transformational leadership. Some processes, procedures and development projects
require more structure, consistency and reliability; this is called transactional leadership.

To read how CIOs are making good on transformational leadership, see

"Transformational CIOs juggle innovation and operations."

Transactional vs. transformational leadership

Transactional leadership is the exact opposite of transformational leadership — it relies
on motivating employees through rewards and punishments. It requires supervision,
oversight, organization and performance-monitoring. This leadership model doesn’t try
to innovate. Instead, it’s rooted in keeping things consistent and predictable over time.
Errors and faults are closely investigated, and the overall goal is to create efficient,
routine procedures.

This style is best suited to departments or organizations that require routine and
structure — areas where businesses want to reduce chaos or inefficiency. But it doesn’t
allow for innovation or future planning the same way transformational leadership will.

Transformational leadership, on the other hand, supports agile environments, especially

where failure carries less risk. You want the development and maintenance of a current
product to remain consistent and error free, but you don’t want that to hinder the
progress and growth of future updates and improvements.

Transactional leadership takes care of creating a consistent development process, while

transformational leadership leaves people free to come up with new ideas and look at
the future of products, services and ideas.

Training and certification

Although transformational leadership skills are considered soft skills, there are still
plenty of resources, certificates and training programs aimed at developing
transformational leaders. Here’s a short list of online resources to earn training and
 certifications in transformational leadership. However, it’s likely you can find an in-
person training course at a local college or university in your home state.

 Georgetown University School of Continuing Studies: Institute for Transformational Leadership

 Georgetown University School of Continuing Studies: Certificate in transformational leadership
 University of Notre Dame Mendoza College of Business: Executive certificate in
transformational non-profit leadership
 Coursera: Transformational leadership: Developing others
 University of Washington: Bothell School of Business Transformational Leadership
Development Programs
 The Great Courses: Transformational Leadership: How leaders change teams, companies and
organizations

Examples of transformational leaders

Harvard Business Review analyzed companies on the S&P and Fortune Global 500 list
to uncover the best examples of transformational leadership. These businesses were
judged on “new products, services and business models; repositioning its core
business; and financial performance.”

 Jeff Bezos, Amazon: Harvard Business Review attribute’s Bezos’ “insider, outsider” status as
part of what makes him a great transformational leader. As someone who jumped from the
finance world, he brought a fresh perspective to e-commerce through years of experience in a
different industry.
 Reed Hastings, Netflix: Hastings tied for first alongside Bezos, and for similar reasons. Hailing
from the software industry, he wasn’t rooted in pre-established process and procedure in the
television industry.
 Jeff Boyd and Glenn Fogel, Priceline: Boyd and Fogel reinvented travel reservations by
charging lower commission fees on reservations, but focused on smaller niche markets (inns,
B&Bs and apartments), eventually spawning Booking.com.
 Steve Jobs and Tim Cook, Apple: HBR points to Apple as an example of “dual
transformation”: Jobs innovated on original Microsoft products while also building a software
ecosystem. Cook has extended on Jobs’ vision, maintaining a focus on innovation, software and
brand loyalty.
 Mark Bertolini, Aetna: Bertolini is known for his realistic management approach in the
healthcare industry. He says his goal is to build strategies around a realistic vision of the future.
 Kent Thiry, DaVita: Thiry managed to take a bankrupt company and turn it into a thriving
business through firm core values that included “service excellence, teamwork, accountability
and fun,” according to Harvard Business Review.
 Satya Nadella, Microsoft: Nadella started at Microsoft in 1992 and worked his way up the
corporate ladder, eventually running the business’ cloud computing efforts, which landed him
the executive position.
 Emmanuel Faber, Danone: Faber started out as an architect for Danone and earned the CEO
job after he helped develop the company’s vision to turn the company into a sustainable health
and nutrition company.
 Heinrich Hiesinger, ThyssenKrupp: Hiesinger become CEO of ThyssenKrupp in 2011 and
helped alleviate pressure from Asian competitors in the steel market by embracing newer forms
of manufacturing, including 3D printing – “new growth areas” that now make up 47 percent of
the business’ sales.
1.
2.

Participative leadership is a managerial style that invites input from employees on all
or most company decisions. The staff is given pertinent information regarding company
issues, and a majority vote determines the course of action the company will take.

Delegation of Authority means division of authority and powers downwards to the

subordinate. Delegation is about entrusting someone else to do parts of your
job.Delegation of authority can be defined as subdivision and sub-allocation of powers
to the subordinates in order to achieve effective results.