1. Transactional and Transformational Leadership: An Overview
Jeremy Dutschke, Ph.D.
Dallas Baptist University

2. History of Leadership Great Man Theory Trait Theories
Behavioral Leadership Theories
Situational Leadership Theories
Contingency Leadership Theories
Neocharismatic Leadership Theories
Leadership Introduction. Bass and Stogdill (1990) note leadership is defined in a variety of ways depending on the philosophical and sociological position of the definer or theorist. Since leaders are found at all levels of groups, organizations, and society, it seems almost everyone intuitively has a concept or opinion of what leadership is or should be, and those concepts throughout history are as diverse as the theoretical definitions present in the literature. Thus, it is not surprising that leadership has been conceptualized, studied, and theorized in very different ways.

3. Neocharismatic Leadership Theories
Effective leadership involves charismatic characteristics:
Visionary
Energetic
Innovative
Empowering
Inspires followers to greater levels of effectiveness
Transactional Leadership
Transformational Leadership
Burns (1978)
Bass (1985, 1993)
Bass and Avolio (1995)
Neocharismatic Leadership Theories. Refocused attention to leadership traits again and their relationship to leader effectiveness which lead to the development of transactional and transformational leadership theories.

4. Transactional Leadership
Leadership grounded in exchange theory in which leaders ... exchange punishment and rewards for follower compliance and effort in order to achieve organizational performance (Bass, 1985)
Attributes:
Contingent Rewards
Management-by-Exception (Active/Passive)
Laissez-Faire leadership
Transactional Leadership. Grounded in exchange theory, this leadership theory posits that leaders use Contingent Rewards, Management-by-Exception (Active/Passive), or laissez-faire leadership by exchanging punishment and rewards for follower compliance and effort in order to achieve organizational performance (Bass, 1985).
Contingent Rewards involves “leaders [who] engage in a constructive path-goal transaction of reward for performance. They clarify expectations, exchange promises and resources, arrange mutually satisfactory agreements, negotiate for resources, exchange assistance for effort, and provide commendations for successful follower performance” (Bass and Avolio, 1995, p. 3).
Management-by-Exception (Active) involves “leaders [who] monitor followers’ performance and take corrective action if deviations from standards occur. They enforce rules to avoid mistakes” (Bass and Avolio, 1995, p. 3).
Management-by-Exception (Passive) involves “leaders [who] fail to intervene until problems become serious. They wait to take action until mistakes are brought to their attention” (Bass and Avolio, 1995, p. 3).

5. Contingent Reward
Leaders engage in a constructive path-goal transaction of reward for performance
Clarify expectations, exchange promises and resources, arrange mutually satisfactory agreements, negotiate for resources, exchange assistance for effort, and provide commendations for successful follower performance

6. Management-by-Exception - Active
Leaders monitor followers' performance and take corrective action if deviations from standards occur
Enforce rules to avoid mistakes

7. Management-by-Exception - Passive
Leaders fail to intervene until problems become serious
Wait to take action until mistakes are brought to their attention

8. Laissez-Faire Leadership
A non-leadership component
Leaders avoid accepting their responsibilities, are absent when needed, fail to follow up requests for assistance, and resist expressing their views on important issues

9. Transformational Leadership
Leadership providing vision, charisma, and empowerment ... to elevate followers, and the leader, to higher levels of performance and achievement (Bass, 1985)
Attributes:
Idealized Influence (Attributed/Behavior)
Inspirational Motivation
Intellectual Stimulation
Individualized Consideration
Transformational Leadership. Leadership that provides vision, charisma, and empowerment to followers through the use of Individualized Influence (Attributed/Behavior), Inspirational Motivation, Intellectual Stimulation, and Idealized Consideration to elevate the followers, and the leader, to higher levels of performance and achievement (Bass, 1985).
Idealized Consideration involves “leaders [who] display conviction; emphasize trust; take stands on difficult issues; present their most important values; and emphasize the importance of purpose, commitment, and the ethical consequences of decision. Such leaders are admired as role models; they generate pride, loyalty, confidence, and alignment around a shared purpose” (Bass and Avolio, 1995, p. 3).
Individualized Consideration involves “leaders [who] deal with others as individuals; consider their individual needs, abilities and aspirations; listen attentively; further their development; advise; teach; and coach” (Bass and Avolio, 1995, p. 3)
Inspirational Motivation involves “leaders articulat[ing] an appealing vision of the future, challenge followers with high standards, talk optimistically and with enthusiasm, and provide encouragement and meaning for what needs to be done” (Bass and Avolio, 1995, p. 3).
Intellectual Stimulation involves “leaders [who] question old assumptions, traditions, and beliefs; stimulate in others new perspectives and ways of doing things; and encourage the expression of ideas and reasons” (Bass and Avolio, 1995, p. 3).
According to Bass (1985, p. 17), a transformational leader has the ability to “arouse or alter the strength of needs which may have lain dormant.”
Transformational leaders possess the power to raise those around them “to a greater awareness about the issues of consequence” (Bass, 1985, p. 17).
Ultimately, transformational leaders motivate their followers to go above and beyond their highest expectations.
Thus, based on the transformational leadership literature, it is also reasonable to hypothesize that scaled, transformational leadership attributes will be positively related to annual institutional enrollment performance (percentage decrease or increase compared to the previous semester or to the same semester in the previous year).

10. Idealized Influence - Attributed
Leaders are admired as role models
Generate pride, loyalty, confidence, and alignment around a shared purpose

11. Idealized Influence - Behavior
Leaders display conviction
Emphasize trust
Take stands on difficult issues
Present their more important values
Emphasize the importance of purpose, commitment, and the ethical consequences of decision

12. Inspirational Motivation
Leaders articulate an appealing vision of the future
Challenge followers with high standards
Talk optimistically and with enthusiasm
Provide encouragement and meaning for what needs to be done

13. Intellectual Stimulation
Leaders question old assumptions, traditions, and beliefs
Stimulate in other new perspectives and ways of doing things
Encourage the expression of ideas and reasons

14. Individualized Consideration
Leaders deal with others as individuals
Consider their individual needs, abilities and aspirations
Listen attentively
Further their development
Advise
Teach
Coach

15. Transactional/Transformational Leadership Research
Follower/Organizational Performance
Avolio, Waldman, and Einstein (1988)
Barling, Weber, and Kelloway (1996)
Howell and Avolio (1993)
Jung and Avolio (2000)
Keller (1992, 1995)
Koh, Steers, and Terborg (1995)
Russ, McNeilly, and Comer (1996)
Sosik (1997)
Spangler and Braiotta (1990)
Waldman, Bass, and Einstein (1987)
Waldman and Yammarino (1999)
Yammarino and Bass (1990)
Leader Effectiveness/Employee Satisfaction
Ronald Deluga (1988)
Hater and Bass (1988)
Howell and Avolio (1993)
Medley and Larochelle (1995)
Seltzer and Bass (1990)
Tracey and Hinkin (1994)
Transactional and Transformational Leadership. Research indicates that the type of leadership approach used affects several factors in organizations including organizational performance, employee satisfaction, and employee performance.
Tichy and Devanna (1986) argue that transformational leaders effectively change and innovate organizations by empowering organizational members to endure change, who will then initiate renewal through the new beginnings created by the change and innovation.
Smith, Carson, and Alexander (1984) sampled 50 ministers of the Northeast Ohio Conference of the United Methodist Church and concluded that effective leadership in these churches was directly associated with improved organizational performance outcomes including church attendance, membership levels, property values, operating budgets, and total giving levels.
Correlations to Employee and Organizational Performance. Various research studies have shown transformational leadership attributes to be significantly correlated with follower, group, unit-level, and/or organizational effectiveness/performance.
Avolio, Waldman, and Einstein (1988) assembled 27 groups of second year MBA students and revealed transactional leadership and transformational leadership to be positively associated with all organizational effectiveness and performance indicators.
Barling, Weber, and Kelloway (1996) studied Canadian bank supervisors and their employees and found transformational leadership to have positive effects on employee perceptions of their supervisor, commitment to the organization, and financial performance within the organization.
Howell and Avolio (1993) also studied 78 managers in a Canadian financial institution and revealed three transformational leadership measures – charisma, individualized consideration, and Intellectual Stimulation – were significant predictors of positive unit performance, while the transactional leadership measures, Contingent Rewards and Management-by-Exception (Passive and Active), were significant predictors of negative unit performance.
Jung and Avolio (2000) studied 194 students during a brainstorming exercise and found transformational leadership directly and indirectly effected student performance in a positive manner through follower trust and value congruence with the leader.
Keller (1992) studied transformational leadership and project group performance in three industrial research and development organizations and found transformational leadership to be a predictor of better project group performance and quality.
Keller (1995) explored the role of transformational leadership and project group performance in 66 industrial research and development and concluded transformational leadership is a predictor of higher quality project group performance for research project groups, but a more directive leadership style is a better predictor of higher quality project group quality and performance for research groups.
Koh, Steers, and Terborg (1995) studied transformational leadership of 89 Singapore school principals and found transformational leadership to directly and significantly effect prediction of positive organizational commitment, organizational behavior, and teacher satisfaction, while only indirectly effecting positive student academic performance.
Russ, McNeilly, and Comer (1996) also studied 400 sales representatives and their sales managers to determine if sales manager transactional leadership or transformational leadership predicts higher performance by the sales representatives. In contrast with other research studies, this study concluded that transactional leadership, and transactional augmented with transformational leadership, predicts better sales performance, than does transformational leadership on its own.
Sosik (1997) studied 36 undergraduate student work groups and concluded high transformational leadership to be significantly associated with better quality solutions, output and perceived group performance than those groups influenced by low transformational leadership.
Spangler and Braiotta (1990) studied audit committees from 42 companies to determine the effects of transformational leadership and transactional leadership on audit committee effectiveness. This study concluded that transformational leadership and the transactional leadership attribute of Active Management-by-Exception positively impact audit committee effectiveness. All other transactional leadership attributes were insignificant or adversely impacted audit committee effectiveness.
Waldman, Bass, and Einstein (1987) surveyed 256 supervisors and managers and found that the transformational attributes of charisma and individualized consideration are significantly and positively correlated with subordinate performance. All transformational characteristics and the transactional leadership characteristic of Contingent Rewards did not show a significant effect, either positively or negatively, on subordinate satisfaction. Management-by-Exception (transactional) was found to adversely effect employee performance and satisfaction with the performance appraisal process.
Waldman and Yammarino (1999) developed a model of CEO charismatic leadership, similar to transformational leadership, suggesting that CEO charismatic leadership positively effects organizational performance through close, direct interaction with the members of the Top Management Team and also through distant, and often times indirect, interaction with followers in lower-level echelons of the organization.
Yammarino and Bass (1990) studied 186 naval officers and Naval Academy alumni actively serving as officers in the United States Navy and revealed that there is a high relationship between transformational leadership and perceived subordinate effectiveness and satisfaction.
Based on these research studies, it can be concluded that transformational leadership attributes are significantly correlated with positive follower, group, unit-level, and/or organizational effectiveness/performance, providing further support for the hypotheses proposed by this research study.

16. Transactional/Transformational Leadership Research - General Conclusions
Transformational Leadership = + Follower Performance
Transactional Leadership = - Follower Performance
Transformational Leadership = + Org. Performance
Transactional Leadership = - Org. Performance
Transformational Leadership = + Leader Effectiveness
Transactional Leadership = - Leader Effectiveness
Transformational Leadership = + Employee Satisfaction
Transactional Leadership = - Employee Satisfaction
Correlations to Leader Effectiveness and Employee Satisfaction. Several other research studies reveal transformational leadership attributes to be significantly correlated to leader effectiveness and employee satisfaction.
Deluga (1988) surveyed 117 manufacturing firms and found that transactional leadership promotes more influencing opportunities between managers and employees than transformational leadership. Transformational leadership is better correlated with leader effectiveness and employee satisfaction than is transactional leadership.
Hater and Bass (1988) surveyed a sample of supervisors’ employees and superiors at a delivery company and found in both instances that the relationships between transformational leadership and effectiveness and satisfaction ratings to be high, while these same relationships were significantly lower with transactional leadership.
Howell and Avolio (1993) studied 78 managers of a Canadian financial institution and found transformational leadership attributes, including individualized consideration, Intellectual Stimulation, and charisma, to positively effect subordinate satisfaction and unit-level performance.
Medley and Larochelle (1995) studied head nurses and their effects on staff nurse satisfaction as perceived by 122 staff nurses at acute care community hospitals and found that transformational leadership is associated with higher levels of staff nurse satisfaction and longer tenure, while there was no association between head nurse transactional leadership and staff nurse satisfaction.
Seltzer and Bass (1990) studied 55 managers and the responses of 138 subordinates regarding their managers and concluded that transformational leadership significantly relates to higher levels of subordinate satisfaction and leader effectiveness ratings by the subordinates.
Tracey and Hinkin (1994) studied five founding principal partners of a successful hotel-management firm and revealed that the principal partner rated most effective by corporate staff members rated significantly higher on levels of transformational leadership attributes and less on levels of transactional leadership attributes while the principal partner rated most ineffective by corporate staff members rated significantly higher on levels of transactional leadership attributes and less on levels of transformational leadership attributes.
Based on these additional research studies, it can be further concluded that transformational leadership attributes are significantly correlated to leader effectiveness and employee satisfaction, reinforcing support for the hypotheses proposed by this research study.

17. Research Summary Schematic
High
Transformational Leadership
Leader +
Performance
Expected Results. Based on the theoretical literature and previous research studies relating to transactional and transformational leadership and their relationship to institutional performance measures, this research study anticipates that CEM transactional leadership attributes will be negatively related to institutional enrollment performance and that CEM transformational leadership attributes will be positively related to institutional enrollment performance.
Enrollment management divisions led by transformational Chief Enrollment Managers (CEMs) are expected to out perform enrollment management divisions led by transactional CEMs.
A general disparity between the CEM’s self-rated transactional or transformational leadership style and the subsequent CEM’s transactional or transformational leadership style as rated by their direct subordinates is anticipated.
Transactional Leadership
Follower 
Low

18. Multifactor Leadership Questionnaire
Developed by Bass and Avolio in 1995
Quantifies attributes of transformational leadership - Idealized Influence [Attributed], Idealized Influence [Behavior], Inspirational Motivation, Intellectual Stimulation, and Individualized Consideration
Quantifies attributes of transactional leadership - Contingent Rewards, Management-by-Exception [Active], and Management-by-Exception Passive]
0 to 4 rating scale
Multifactor Leadership Questionnaire. The design of this research study is based on the utilization of the Multifactor Leadership Questionnaire (Form 5X Short), developed and revised by Bass and Avolio.
The questionnaire consists of 45 descriptive items, which require a response on a 0 – 4 rating scale. On this testing scale, “0” represents “Not at all”; “1” indicates “Once in a while”, “2” denotes “Sometimes”, “3” means “Fairly often”, and “4" signifies “Frequently, if not always”. The 45 items represent the testing of nine leadership attributes (Bass and Avolio, 1995). These nine leadership variables represent a full range of leadership styles from transformational leadership to transactional leadership to laissez-faire leadership.
The five variables representing transformational leadership include: 1) Idealized Influence (Attributed); 2) Idealized Influence (Behavior); 3) Inspirational Motivation; 4) Intellectual Stimulation; and 5) Individualized Consideration.
The three attributes representing transactional leadership include: 1) Contingent Rewards; 2) Management-by-Exception (Active); 3) and Management-by-Exception (Passive). Laissez-faire leadership is tested as a single attribute on the MLQ-5. Each of these nine variables has four items dedicated to it on the questionnaire. Specific criteria will be used to numerically characterize each CEM into discrete leadership categories.
All of the proceeding data will be documented and statistically analyzed using NCSS, a comprehensive statistical program frequently used to conduct research analysis.
The statistical analysis of the MLQ-5 data will result in numerical data sets by adding all five transformational leadership attributes and dividing by five to derive an average score. Chief Enrollment Managers (CEMs) whose average score is 3.0 or higher will be considered primarily transformational in leadership style. Similarly, all three transactional leadership attributes will be added and divided by three to derive an average score. If an average of all three transactional leadership attributes is 3.0 or higher, then the CEM will be considered primarily transactional in leadership style.

19. Strengths of the Transformational Approach
Widely researched from many different perspectives
Possesses an intuitive appeal
Treats leadership as a process that occurs between followers and leaders
Provides a broader view of leadership that augments other leadership models
Places strong emphasis on followers’ needs, values, and morals
Substantial evidence that transformational leadership is an effective form of leadership

20. Criticisms of the Transformational Approach
Lacks conceptual clarity – difficult to exactly define its parameters
Validity and reliability of the MLQ is still be established
Treats leadership as a personality trait, rather than a behavior in which people can be trained in and learn
Elitist and antidemocratic – “Heroic leadership” bias
Based primarily on qualitative data collected from leaders serving in very visible positions within organizations
Potential to be abused by the leader – changing follower values, moving in a wrong direction, etc.

21. Transformational Leadership and Servant Leadership

22. THANK YOU! GOD BLESS YOU!