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Transactional and Transformational Leadership
Abstract: Leadership is one of the features which helps in identifying the team effectively. A good leader can promote the development of a group and enhancing the desired results. This paper highlights the transactional and transformational theories of leadership developed by Burns (1978) and Bass (1985), explaining the differences in the leadership styles using constructive/developmental theory. Every organization expects its leaders to be self-efficient and capable of leading a group as well as achieving the long-term goals in critical and fast paced environments. This paper comprises of some studies that shows how the transactional and transformational leadership styles can be implemented, their relationship, how to identify a team and the sacrifices a leader gives. The studies reflected in this paper, determines the level of the leadership styles used in different ways and analyzes how a group of people communicates in a virtual manner by following the transactional and transformational leadership. It also throws light on the skills needed to be more transformational and to provide a clear differentiation between both transactional and transformational leadership. It also specifies the areas where transformational leadership shows excellence which includes health & safety along with important business functions like cost, quality, productivity, customer service and many more. As a result, the impact of leadership abilities using transactional and transformational leadership and various levels of these leaderships are shown in this paper.

Keywords: Transactional and transformational leadership, leader, changes, organization, leadership, transactional leadership, transformational leadership, organizational management, public corporations, transactional leadership style, transformational leadership style, motivation, competence, performance and multiple linear regression, self-sacrifice, team identification.

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Transactional and Transformational Leadership
A transactional leadership is the one in which the leader and the individual work together influencing each other so that each one of them leans something (Yukl, 1981). In nutshell, giving the followers something, they need and taking something, the leaders need is a transactional leadership. Both the parties will be involved in a mutual relationship where they depend on each other and the contributions are identified and appreciated (Kellerman, 1984). In such cases, the leaders are always treated great as the followers always believe in what the leader says, and the leaders will always try to reach the expectancy level of their followers. Thus, effective transactional leadership is contingent on the leaders’ abilities to meet and respond to the reactions and changing expectations of their followers (Kellerman, 1984).

Burns (1978) and Bass (1985) have distinguished between the different levels of transactional leadership. As suggested by Burns, the range in which the transactional leaders and their followers engage themselves varies from obvious to less obvious. According to Bass, the transactional leaders have many different transactions available with them. Followers follow the path of their leaders to achieve desired goals are the most common transactions. Here, the leaders clarify the actions to be done by the followers while the organization’s mission is fulfilled.

Transformational leadership does not involve exchanges between the leader and follower though it believes the leader. Justice and integrity are two such values where the transformational leadership works out of deep personal value systems, as suggested by both Bass (1985) and Bums (1978). As these values cannot be negotiated or changed, Burns refer them as end values. Transformational leaders can unite their followers and modify their goals and beliefs by providing their own standards. This results in achieving higher performance than before (Bass, 1985). Perhaps the concept of charisma (House, 1977; Weber, 1947) comes closest in meaning to Burns’ (1978) and Bass’ ideas of transformational leadership. According to House, charismatic leaders as those “who by force of their personal abilities are capable of having a profound and extraordinary effect on followers” 1. He further contended that the term “is usually reserved for leaders who by their influence are able to cause followers to accomplish outstanding feats” 1.

Transactional versus transformational leadership
Burns’ original formulation (which is the first theorists of leadership) says that, transformational and transactional leadership are two different styles of leadership. It also says that the leader can either be transactional or transformational but cannot possess the characters of both at the same time. However, according to Bass’s theory of leadership, as transformational and transactional leadership are two different dimensions of leadership, hence the leaders can be both transactional and transformational, which is caused by leadership behavior. Recent studies show that most researchers agree with Bass’s theory of leadership.

Transactional and transformational leadership is characterized by the following characteristics 2:
– Do unto others as to thyself, – Consistency, – Contacts with the followers in production, not in his office, – Do not make decisions in an emotional state, – Have time to talk to supporters and heed their advice, – Their own self-control, – Clear communication and awareness of followers, – Taking responsibility for his actions and the actions of followers and – Be a leader with vision.

Multifactor Leadership Theory
In past few decades, he multifactor leadership theory developed by Bass (1985) has received a great deal of theoretical and empirical attention (Bass ; Avolio, 2000; Judge ; Piccolo, 2004; Lowe, Kroeck, ; Sivasubramaniam, 1996). This is because of the following three prime factors. First, the leadership model introduced by Bass includes a wide range of behaviors namely transformational, transactional, and non-leadership (or laissez-faire). Second, the major principle of the theory is significantly supported by the scientific literature (cf., House ; Shamir, 1993, Howell ; Avolio, 1993; Kirkbride, 2006; Lowe et al., 1996). Third, through proper training and learning, the behavior of this leadership approach can be achieved (Parry ; Sinha, 2005) and the important people of the organizations will be linked with these behaviors (Hater ; Bass, 1988; Howell ; Avolio, 1993; Lowe et al., 1996; Waldman, Bass, ; Yammarino, 1990). For instance, the meta-analytic evidence proposed by Lowe et al. (1996), states that the transformational leadership was related to subjective and objective ratings of leadership effectiveness with corrected correlations of .73 and .30, respectively 6. Further, creativity and innovation (Avolio et al., 1999) and commitment (Bass ; Riggio, 2006) are impacted by transformational leadership as stated by past studies. Finally, the evidence presented by Dvir, Eden, Avolio, and Shamir (2002) suggests that the results achieved by the group which received transformational leadership training showed a better unit performance than the group which has not received the training.

Constructive/Developmental Personality Theory
Constructive/developmental theory by Robert Kegan (1982) describes the range of a person’s experiences using a personality variable. According to the constructive part of the theory, people tend to build a subjective understanding of the world based on their experiences and this is far different from the experiences of the real world. This theory highlights the patterns in which humans tend to build the meaning of the experiences they encounter by showing the progression of their level of understanding from simple to complex. Adults have a personality structure which is supported by Constructive/ developmental theory. Humans are in different levels where subject for on is object for another at a higher level. This helps the adults in analyzing themselves and their interpersonal relationships.

The table below shows three of the developmental stages (out of 5) described by Robert Kegan (1982) which characterizes the level of understanding in adults 1.

Subject (Organizing Process) Object (Content of Experience)
2 Imperial (Lower-order Transactional)
Personal goals and agendas Perceptions, immediate needs. feelings
3 Interpersonal (Higher-order Transactional)
Interpersonal connections, mutual obligations Personal goals and agendas
4 Institutional (Transformational) Personal standards and value system Interpersonal connections. mutual obligations
Table 1: Stages of Adult Development Showing the Organizing Process (“Subject”) and the Content of that Organizing Process (“Object”)
The “transition” elements from transactional to transformational leadership style is shown in the below model (Fig 1). When the business enterprises have special requirements where the conditions have high intensity of changes, the transformational style is applied. It is not applicable in situations of high coverage with weak intensity or high rate of change with low coverage. When there is low intensity of change and low coverage, we apply transactional style.

There might be some situations in which the transactional leadership is associated with the business outcomes like job performance (Judge & Piccolo, 2004). However, FTF groups can have high efficiency with the use of transformational leader. Generally, there is very little focus on the effectiveness of transactional and transformational leadership in context of virtual teams (Hambey, O’Neill, ; Kline, 2007). The analysis of the characteristics of transformational and transactional leadership in CMC contexts is currently being researched. The research is about how the styles are followed by the followers and the satisfaction level achieved by following them.

Fig 1: Model of changes of leadership content
Organizational success depends on specific factors and understanding them is important because of the role of the leadership in development training programs (Parry ; Sinha, 2005) and creating competitive advantage. It is equally important to analyze how these factors changes across the organization’s characteristics. The purpose is now on extending the research by focusing more on the leader behaviors and on the performances within a wide range of valued criteria in the organization like team potency, team cohesion etc. and its contexts like private healthcare and military. The leadership behaviors sometimes change its importance in contexts (Den Hartog et al., 1999; Johnson & LeBreton, 2004; LeBreton, Hargis, Griepentrog, Oswald, & Ployhart, 2007). There have been false results to measure the importance as identified from past researches. For these reasons, the current research is of utmost importance. Apart from this, the new research data will assist the people practicing the leadership development approaches. Different organizations have desired outcomes because of the awareness they have on these behaviors which are cost and time effective and context sensitive. The following method shows the research conducted on a group of people and the results of the analysis.

In this research study, 60 psychology students (33 females and 27 males) are randomly assigned to ten groups of 6 members each. All the students are of age group ranging between 20 and 24 3.

The students were asked to work on a project where they will produce a group report on scientific subject. They can communicate within their group using online forums. They were provided with university credits in exchange to the work. The project is divided into two equal phases where the first is to select the subject, examine it, collect required data/articles, develop the hypotheses, and identify the required research strategy and instruments. Analyzing the collected date, discussing the results and preparing the report as an article with APA style was in phase two. All the tasks were supposed to be performed online within a span of 4 weeks (2 for each). Few of the students were asked to lead the groups as they had good knowledge on the subject and because of them being older than the others helped the group succeed in their work. Two accomplices were also present in each group apart from the participants. Both the transformational and transactional leadership was implemented alternatively in all the groups (in groups 1-5, accomplice A acted as a transformational leader in phase 1 and accomplice B as transactional leader in phase 2; and in groups 6-10, accomplice A as transactional leader in phase 1 and accomplice B as transformational leader in phase 2). Each student was provided with a questionnaire to determine the Group task satisfaction at the end of the project (Mason & Griffin, 2002; 2003). Identifying the leader of the group was the next task given to them. At the end, an Adjective checklist is given to them (ACL; Gough & Heilbrun, 1965) and asked to describe the leader using those adjectives.

The Adjective checklist is used to describe oneself as well as the work activities, ideas, theories etc. attributing common adjectives from a choice of 300, creating a profile on 37 possible scales. The author composed a questionnaire to measure the Group Task Satisfaction (Mason & Griffin, 2002; 2003) by including the attitude of the group for the project and the work environment. The questionnaire consisted of 12 questions given on Likert scale ranging from 1 = completely unsatisfied to 7 = very satisfied.

The participants had to identify that the accomplices were the leaders of the group. None of the students identified the designated leader and these results are omitted from the analysis. The transactional leader is described as in greater need of dominance (Dom), of order (Ord), of exhibition (Exh), with high ideal self (Iss), with high military leadership (Mls), and with low originality and high intelligence (A-4) (3.42 < ts < 4.85; p < .001) using the checklist. On the other hand, the transformational leader was characterized by a greater number of favorable adjectives (Fav), by a greater need for achievement (Ach), endurance (End), intraception (Int), nurturance (Nur), change (Cha), with a creative personality (Cps), and a high originality and high intelligence (A-2) (3.35 < ts < 5.04; p < .001). No gender differences emerged in this analysis. The above analysis and the results within the two contexts shows that the transformational approach has produced higher level of satisfaction than a transactional approach (t(109) = 4.39; p < .001).

Although previous researchers have investigated the relationships among leadership, team identification, and leaders’ self-sacrifice, they have not investigated in depth the relationship involving different leadership styles. It is known that different leadership styles evoke different levels of team cohesiveness, job satisfaction, and self-esteem. For example, within the transactional/transformational leadership framework, Bass (1985) and Bass ; Avolio (1995) have shown that, when the leader uses a transactional style, followers are motivated to obtain personal rewards that only the leader can grant, and to replicate behaviors that have been successful, discarding unsuccessful ones. When the leadership style is transformational, the fostering of the group process goes beyond the exchange of incentives and corrective transactions between leaders and followers.
Therefore, the following hypotheses were proposed 4:
Hypothesis 1: There will be a stronger relationship between transformational leadership and team identification than between transactional leadership and team identification.

Hypothesis 2: There will be a relationship between transformational leadership and leader self-sacrifice, but there will be no relationship between transactional leadership and leader self-sacrifice.

Participants and Procedure
Participants were 186 call center employees (83 men and 103 women) aged between 23 and 42 years (M = 31.3, SD = 5.67), of whom 62% worked part time. They were all voluntarily enrolled from a group of about 300 workers. Participants were asked to think about their leader and report on their leadership style by responding to a survey, which we distributed to the participants and which was collected 10 days later by a research assistant. Instruments Participants indicated their level of agreement with each statement. Team identification. Participants responded to six items in a survey derived from Mael and Ashforth (1992) and van Knippenberg and van Schie (2000), on a 6-point scale ( = .71) ranging from 1 (strongly disagree) to 6 (strongly agree). They were told to think about their work team. A sample item is: “When I speak of my work group, I usually say us rather than them”. Self-sacrifice. Self-sacrificial leadership was assessed with five items inspired by the work of Conger and Kanungo (1998), on a 5-point Likert-type scale ( = .82) ranging from 1 (strongly disagree) to 5 (strongly agree). A sample item is: “My supervisor is willing to make personal sacrifices in the team’s interest”. Transactional and transformational leadership. Employees’ perception level of transactional and transformational leadership was assessed using Bass and Avolio’s (1995) Multifactor Leadership Questionnaire ( = .78) 5X-Short form (MLQ 5X-Short). This questionnaire has 45 items that are assessed on a 5-point scale ranging from 0 (not at all) to 4 (frequently, if not always).

We then divided the participants into two groups: employees headed by transactional leaders (97 participants) and employees headed by transformational leaders (89 participants). The main and interaction effects of the level of leadership (transactional and transformational) and leader self-sacrifice on team identification were calculated separately for each group, using a hierarchical regression model. We centered transactional and transformational leadership and leader self-sacrifice prior to the analyses and based the interaction term on these centered scores. The means, standard deviations, and intercorrelations for the two groups are reported in Table 1, and the regression results are shown in Table 2. Leadership style and self-sacrifice were positively related to team identification in both transactional and transformational conditions, but a stronger relationship was observed in the transformational context. A further difference is related to the interaction effects of the level of leadership and self-sacrifice. Simple slopes analysis (Aiken ; West, 1991) revealed the absence of interaction effect in the transformational leadership condition and the presence of interaction effect in the transactional leadership condition. Specifically, it was revealed that transactional leadership levels were more positively related to team identification when leader self-sacrifice was low than when leader self-sacrifice was high.

For functional excellence to occur, the individuals involved in whatever the process need to be engaged. Said another way, if both the management and the workers are not engaged in the safety process, excellence will not be an outcome. Transformational leadership is the key to ENGAGEMENT.. When the worker is clearly engaged in the safety process, world class safety becomes a reality. Importantly, engagement of the workforce cannot be accomplished unless leadership is engaged. This is not a chicken and egg kind of thing. Leaders must first start the engagement process and only then is it reasonable to expect the workforce to become engaged.

Critical skills
Transactional leadership is not all bad. In fact, it is essential for the success of any enterprise. Most senior managers are hardwired to be more transactional than transformational. They need to understand the benefits that can come from achieving a balance that requires them to become more transformational. H;S pros may have to “coach up” their management on this concept. I will focus on five of the most critical skills that characterize a transformational leader.
Achieving H;S excellence
The role of transformational leadership and engagement in achieving H;S excellence can best be explained by Figure 2 describing a simplistic but typical journey an enterprise takes in achieving excellence. The vertical axis is injuries and the horizontal axis is time. Obviously, higher injury rates will occur if the attitude of the enterprise is merely safety awareness, but with no real organized approach to safety and no focused ownership. Compliance is also transactional since it represents a checklist approach. When management realizes it owns safety, results get better than average. When management becomes engaged in the process, results continue to improve. Management engagement is critical to achieving worker engagement. Once both management and the workforce are engaged, excellence is clearly on the horizon.

Leadership Development Best Practices
Resources are directed into leadership development by organizations due to effective leadership value on organizational performance and due to less number of birth rates and baby-boom generation retirements (Avolio, Avey, ; Quisenberry, 2010; Fulmer, 1997; Riggio, 2008). 20 of the most successful companies placed a premium on effective leaders at all levels because of the Leadership survey, and Hay Group’s Best Companies conducted in 2009. As a result, Leadership development is being considered as a growth area for the organizational consultants.
Leadership can be developed in many ways. However, the design quality, integration and implementation can be best achiever through effective leadership development than with the components used (Day, 2001; Day & Halpin, 2001; McCauley, Velsor, & Ruderman, 2010). Development of leaders and leadership can be best achieved through the ‘best practices’ approach which focuses on the optimal organizational effectiveness. However, the agreement on what establishes the best practices and how such optimistic benchmarks can be applied in organizations (Haskins & Shaffer, 2009). The following can be considered as the key components for effective leadership 6:
• Aligning leadership competencies with business strategy • Fostering innovation, creativity, and continuous improvement • Recruiting, identifying and developing future talent and succession • Executing and promoting organizational strategy and change • Building customer and employee loyalty • Engaging in a supportive organizational culture • Evaluating the efficacy of leadership development initiatives and programs
Most of the research questions are not addressed even though the current research has provided with additional information on the above studies. For instance, only one variable at a time has been considered for analyzing the effect of context on leadership in both the present and past studies. Future studies will have more impact when simultaneous analysis of the contextual variables is done, since various elements determine the human behavior. Also, a large portion of the studies inspecting the transformational leadership process has concentrated on the positive results related with transformational leader behaviors. Though this work is helpful, the reasons of such behavior is not considered. Hence, it can be useful if the future studies can consider transforming behaviors using different intraindividual causes (e.g., personality, motivation, values).

The culture of an organization is determined by the quality of co-worker interactions in organizations characterized by transactional leadership, but it may be influenced significantly by the values and standards of leaders when the dominant mode of leadership is transformational. Again, the constructive/developmental framework provides us with unique challenges for the study of leadership. e. For successful creation of a new competitive environment the essential are creativity, imagination, reflection and courage. Any vision, which is not based on strong material funds, remains a mere fantasy. Transformational leaders, looking at the goal, provide guidance to their followers and direct them to reach the desired state, to realize the vision. The results of the present research are significant because they confirm that what occurs in interactive FTF situations (Bass & Avolio, 1993; Jung & Sosik, 2002) also occurs in CMC contexts. Specifically, what emerges is the figure of a more charismatic transformational leader, less centered on the task and more on relationships, oriented more towards the future and the development of the workgroup. This leader is generally assigned more positive adjectives and perceived as being not only intelligent, but also endowed with creativity and originality. On the other hand, the transactional leader is described as more authoritative, having great self-esteem, and being more centered on the job at hand. Furthermore, there are no differences between the negative adjectives used to describe the two types of leader. Overall both appear to be perceived as equally positive figures, who are intelligent and sensitive, though greater emphasis on sensitivity is attributed to transformational leaders. As far as levels of satisfaction are concerned, the results are consistent with those of Hoyt and Blascovich (2003) who observed higher levels of satisfaction with a transformational rather than a transactional leader in virtual interactive contexts (and with an exclusively female sample). Overall, these results are consistent with the literature on the subject, extending the conclusions reached in face-to-face interactive contexts to virtual groups as well. Limitations of this research are related to the use of a sample of psychology students. Future researchers could analyze this using different groups and with more complex problem solving. All these aspects of leadership need to be considered by future researchers so that groups may have the benefit of a carefully designed workplace in which the right leader is in the right place. This is based on the principle that some leaders’ styles are more suitable than others for achieving specific group objectives, given that they follow a logic of affordances determined by the type of interaction used in the work context.

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