Transactional Leadership

By: Pobert II Smith


In a 1996 article, Mutch argues that there exists a need for better thinkers, problem solvers, and inquirers. Leaders need to be able to identify changes as they occur, know the context of their business environment so that they will be able to discern new trends. The leader has to seek out or test new approaches, devise varying strategies for leading, search. Adjustment, learning, adaptability is no longer a nicety or a coping mechanism - it is a leadership imperative. Leadership aspect of the SPL model is defined as follows: providing the appealing vision, ability to influence and lead people towards the achievement of certain goals, motivate, inspire and support people towards the goals of the company, empower and develop new generation of leaders.

The above mentioned behavioral and relationship related assumptions of the SPL model will be taken in the following paragraph as basis for the comparison of transactional, servant and transformational leadership models. The results of this comparison will be provided in the conclusion.

According to Nahavandi “transactional leadership is based on the concept of exchange between leaders and followers. The leaders provide followers with resources and rewards in exchange for motivation, productivity, and effective task accomplishment (2006, p.240)”. Transactional leaders are usually very effective in implementing the vision, but not necessarily in one’s creation. This leadership model is though being effective does not focus on the long-term outcomes. It is limited to material instead of meaningful outcomes.

Transactional leaders are generally considered more traditional. And some transactional leaders might apply the principles of informational literacy and lifelong learning to their companies and followers or themselves, but not much attention is the research is dedicated to these qualities for the transactional model, as they are considered irrelevant. The question of providing resources and getting the work done now or providing the employees with the expensive or at least time consuming training helping to allocate the necessary resources and information themselves would be decided in favor of the cheap, profitable, short-term solution, even though in the long term this solution might lose its benefits.

The transactional leader has clear performance expectations, goals, and path that will link achievement of the goals to rewards. The leader also monitors the performance and takes actions if necessary (Smith, 2004). Their ability to think critically can be proven by their ability to create functional organization.

The influence of transactional leader is embodied into his position, his title and nature of transactional interaction between the leader and the followers. Transactional leaders are usually good with tactics, short-term goals definition and controlling the achievement of these goals.

Leader motivates people through the process of social exchange which includes reward-based transactions. The leader supports his followers with the necessary resources but not necessarily their development. In the context of SPL Model leaders do not quite fulfill their function of being leaders. Instead of providing the resources needed the leader is supposed to teach the followers to identify, what resources are needed and how to find them and apply, not simply provide.

Laub quoted by Smith (2004) define six components of servant leadership: valuing people, developing people, building community, displaying authenticity, providing leadership, sharing leadership. The leader here has a role of facilitator and his motivation to lead arises from an underlying attitude and belief that he is no better than those who are led.

Servant leaders understand their role as opportunity to serve others and to develop them to their full potential (Smith, 2004). Servant leaders place the interest of the followers before their own interests, so their own development can be neglected in favor of people. Servant leadership fosters internal personal growth. Servant leaders recognize that leadership is a relationship not a set of attributes or traits (Reinke, 2004). Leaders build people and community, dream, heal people in the organization.
In the opinion of Smith (2004) servant leadership tends to cultivate a more static approach to the external environment than transformational leadership. Followers are passive to the external environment and unlikely to want to change the internal conditions. This means that servant leadership approach might fail under the pressure of change and modern developments. None of the scholarly sources identified critical thinking or information literacy as the components of this leadership model. Under the circumstances of information abundance and the only constant being change, this ability very important in the SPL model.

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Robert Smith has spent more than 20 years working as a professor at New York University. He is always interested in helping students with doing Economics papers on any topic. Now he spends most of his time with his family and shares his University experience in writing student Sociology papers. He is a right person to ask about where to buy a thesis.

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