By Christie Athanasiadou, Business Development Manager & Growth Lead at Pear CoachesThere are more than 200 definitions of leadership and the roles of a leader in the literature, but for most people a leader is someone in a group or...
By Christie Athanasiadou, Business Development Manager & Growth Lead at Pear Coaches
There are more than 200 definitions of leadership and the roles of a leader in the literature, but for most people a leader is someone in a group or an organization, responsible for coordinating and inspiring the other group members. Success comes from constructive leadership and charismatic style.
A leader’s personal attributes may indicate cues about the particular style that each leader adopts in an organization. Leadership effectiveness is partially predicted by the leadership style which, in turn is partially predicted by the traits possessed by the leader. A common distinction is made between two main approaches to leadership: transformational vs transactional.
Defining the Leadership Styles
The transformational leadership style is where the leader has a clear vision, makes employees believe his vision, creates a sense of belonging and proceeds to dynamic changes.
The transactional leadership style, conversely, is where leaders are primarily result-oriented, hire people that fit to the particular job, solve problems and establish order, essentially the leadership is based on transactions between manager and employees.
Comparing the Two Styles
Leaders often display characteristics from both leadership styles, therefore distinction is sometimes hard. Research has revealed that CEOs who adopt a more transformational style, are seen as more effective leaders compared to those who adopt a more transactional approach, according to the followers’ responses on the Multifactor Leadership Questionnaire.
Unsurprisingly, research shows that the transformational style of leadership was ranked the highest and more desirable leadership style across follower satisfaction, follower motivation, leader effectiveness, overall better than transactional style.
Employees also report exerting a greater amount of effort when being supervised by a transformational leader, and report exerting very little effort in response to transactional leadership style. However, a lot of variation exists within each leadership style displaying both positive and negative elements.
Certain types of behavior characterize the transformational leader. Yet, transformational leaders vary widely in their personal styles. H. Ross Perot is self-effacing: “I don’t look impressive,” he says. “To a lot of guys I don’t look like I could afford a car.” But, Perot created the $2.5 billion EDS organization from his vision, initiative, emphasis on hard work, and a special organizational culture with strict codes of morality and dress and quasi-military management. His personal involvement in the rescue of two of his employees trapped as hostages in Iran in 1979 is an extreme example of individualized consideration, a transformational factor. Leslie Wexner of The Limited, Inc. enjoys a more flamboyant lifestyle. But like Perot, Wexner converted his vision of a nationwide chain of women’s sportswear stores into a reality through his own hard work. He stimulates employee participation in discussions and decisions and encourages them to share his vision of the company’s future. Many on Fortune’s list of the 10 Toughest Bosses would not live up to modern behavioral science’s prescriptions for the good leader: one who initiates the structure for interaction among his colleagues, and who does so with consideration for their welfare.
Travis Kalanick (former CEO of Uber criticized for his ambiguous leadership style) has now resigned and been replaced by Khosrowshahi. On that note, Uber should keep the positive aspects of transactional leadership style such as fulfilling promises of recognition, pay increases to those who work harder, and advancement for employees who demonstrate extraordinary performance and at the same time, reject the negative aspects previously adopted by Kalanick such as verbal punishment to less competent employees and unequal treatment.
Adopting the positive aspects of transformational leadership is crucial for the leader as well as for the entire company to display opportunities for reshaping its distorted self-image and improving its success in staff recruitment, employee selection, and promotion. Therefore, a transformational leadership style, combined with dominant leader traits and HR knowledge, has positive impacts on the organization’s design of its jobs and organizational structure.
For information on leadership coaching for yourself, your managers or team, email contact@pearcoaches.com or call/text 888–708-PEAR (7327).
About the Author
Christie Athanasiadou, Pear’s Business Development Manager & Growth Lead, is an I/O Psychologist specializing in corporate leadership, group dynamics and organizational culture. She is a great communicator who enjoys building high-performing teams which generate influential leaders in high-growth environments. Her passion is helping professionals exceed their potential and achieve their career goals. Areas of expertise include organizational change and business transformation, innovation, the use of psychological nudges, judgment and decision-making, behavioral economics, neuroscience, cognitive biases, psychological primes, diversity and inclusion, and the importance of purpose, wellbeing, and happiness in work and life.
Why Transformational Leadership Beats Transactional Leadership was originally published in Pear Coaches on Medium, where people are continuing the conversation by highlighting and responding to this story.
