1. Transactional Leadership
The Transactional – Transformational Leadership Typology
And Traits of Transactional Leaders

2. History of the Theory
Max Weber first described Transactional-type leadership, calling it Legal-Rational authority
This is one of three sources of authority:
Charismatic
Traditional
Legal-Rational (Transactional)
For Weber, Legal-Rational authority is the most stable, and therefore the most mature form

3. History of the Theory
James MacGregor Burns, and later Bernard Bass, developed the Transactional vs Transformational leadership typology
MacGregor Burns defines leadership as:
“Leaders inducing followers to act for certain goals that represent the values and the motivation—the wants and needs, the aspirations and expectations– of both followers and leaders” (Leadership, 1978)
The Transactional-Transformational typology focuses on the leader’s actions and the leader-follower interaction, rather than the internal processes of the leader

4. Transactional vs Transformational
The two types of leadership differ based on the nature of the interaction between leaders and followers
Transactional: Initiative taken for purpose of exchanging valued things
Transformational: Leaders and followers engage to “raise one another to higher levels of motivation and morality”

5. Transactional Leadership
Leader and followers pursue joint purpose
Leader takes initiative to make contact, with the purpose of mutually beneficial exchange
Examples:
Political: Logrolling votes in Congress; Politician exchanges promises for votes
Economic: Exchanging commodity for money; labor for a wage
Social: Teacher gives grade for coursework
However, there is no enduring purpose that binds the leader and follower together

6. Maslow’s Hierarchy of Needs
Transactional leaders focus on lower order needs to create motivation
Basic necessities and security to motivate behavior, rather than higher purpose
Transactional Leadership focuses on process rather than innovation
Focus is on reward and punishment

7. Traits of Transactional Leaders
Work within existing system (or organizational culture)
Focus on marginal improvements to follower performance
Use reward and punishment to incentivize follower behavior
Appeal to followers’ self-interest
More management than leadership
Process and task focused
Management by Exception: Punish deviation, reward task completion

8. Benefits of Transactional Leadership
Responsive (rather than proactive)
Effective in crises, well-defined hierarchies, and simple/defined problems
Transactional leadership is good for maintaining status quo

9. Transactional vs Transformational
Responsive
Within system/culture
Impersonal
Appeal to lower-order needs
Transformational:
Proactive
Transcendent/Innovative
Appeal to higher purposes

10. Relation to Other Leadership Theories
Focused on behaviors and actions of leaders, rather than traits
Transactional leadership employs the known responses to reward and punishment, as documented by B.F. Skinner and others
Transactional leadership is closest to task-oriented leadership and “telling” (Fielder 1967; Hersey and Blanchard (1976)
While Burns and Bass see Transformational leadership as superior, the relative merits depend on the situation (Contingency)

11. Sources
Bass, Bernard. “From Transactional to Transformational: Learning to Share the Vision.” Organizational Dynamics 18:3 (Winter 1990): Pages Bass, Bernard, and Ralph Melvin Stogdill. Bass & Stogdill's Handbook of Leadership: Theory, Research, and Managerial Applications. New York: The Free Press, Kuhnert, Karl W., and Philip Lewis. "Transactional and Transformational Leadership: A Constructive/Developmental Analysis." Academy of Management Review 12.4 (1987): MacGregor Burns, James. “Transactional and Transforming Leadership.” from Leadership. HarperCollins Publishers, Inc., Odumeru, James A. and Ifeanyi George Ogbonna “Transformational vs. Transactional Leadership Theories: Evidence in Literature," International Review of Management and Business Research 2:2 (2013).