This style of leading relies on an external form of motivating individual, often money. Transactional Leadership is a theory or style first discussed by sociologist Max Weber in 1947, and later expanded upon by Bernard M. Bass, who also played a leading role in the development of Transformational Leadership. Transactional leaders, on the other hand, tell group members what to do and when to do it. Transactional leadership emphasizes results, stays within the existing structure of an organization and measures success according to that organization’s system of rewards and penalties. In contrast with a transformational leader, a transactional leader accomplishes goals by rewarding employees who meet expectations (Bass, 1990). First described in 1947 by Max Weber, this practice is centered on the management process that involves controlling, organizing and short-term planning. Transactional leadership is also referred to as managerial leadership because it focuses highly on subordinate supervision, organization, and performance. The term “transactional” comes from the fact that these types of leaders are looking to motivate by exchanging performance for rewards or discipline. Success of this leadership style is directly tied to the leader. Rules, procedures, and standards are essential in transactional leadership. Because of this, the transactional leadership style tends to maintain existing systems within the organization versus helping to take the organization to the next level. However, as of 2004, the company was suffering from a decline in membership and productivity. 3. In most instances, the company is well-established and not searching for change within the organization. Sign up to find out more in our Healthy Mind newsletter. However, two industries where you’ll see this type of leadership prevalent are within sales and manufacturing. This is because the transactional leadership approach is so straightforward, easy to learn, and easy to understand. This leadership style was widely used after World War II in the United States, when the government was focused on rebuilding and required a high level of structure to maintain national stability. Many examples of this style of leadership exist across industries. As the leader is like a driver, a ship captain who gives the subordinates a direction, inspiring and motivating them to … Performance may be a direct result of the perceived value of the reward by team members. The key to it working is in the abilities of the leader with this style. The basic assumptions of Transactional Leadership are: 1. By assigning clearly defined duties to particular individuals, leaders can ensure that those things get done. International Journal of Applied Sociology. The core consists of a clearly set exchange between the leader and the employee. Ever wonder what your personality type means? … The organization also has fixed methods and operations that require little leeway or creativity to get the job done. Followers are not encouraged to be creative or to find new solutions to problems. In Jr. High School, I wrote a... Hi! It’s directive in nature, where the outline of the goals come from the top down. The transactional style of leadership was first described by Max Weber in 1947 and then by Bernard Bass in 1981. Sultana U, Darun M, Yao L. Transactional or transformational leadership: which works best for now?. International Journal of Industrial Management (IJIM). The leaders of the use of this style are focused on the specific leaders of the implementation and use … Transactional leadership involves motivating and directing followers primarily through appealing to their own self-interest. It is the most common type of leadership style used in large corporate environments, international agreements, and military operations. It works well at lower levels of an organization, where accomplishing tasks to meet company objectives is key; upper levels consist of those who are able and want to provide more vision and broad direction for the business. Transactional Leadership is a leadership style where a leader manages his or her juniors based by either rewarding their good work or by penalizing their bad work. Public speaking drives people, encourages change and instils confidence among them, all of which are leadership skills. In transactional leadership, rewards and punishments are contingent upon the performance of the followers. link to Public Speaking - The Secret to Developing as a Leader, link to Effective Leadership - The Roadmap of a University Coach, Transactional leadership is generally clear-cut, meaning that the objectives are clear and the rewards are set to be attainable. , leaders can help maintain the status quo and âkeep the ship afloat, so... 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