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TRANSACTIONAL AND
TRANSFORMATIONAL LEADERSHIP
LESSON 3 – PART 4
PREPARED BY: DR. MUKUNDA KUMAR
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8/18/2019 Lesson 3 - Transactional and Transformational Leadership - Part 5
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
• Another type of leadership based largely on the leader’s
personal qualities is:
• Transformational leadership:
i. Has a substantial impact on followers and
ii. Can potentially renew an entire organiation.
• !ne way to understand transformational leadership is to
compare it to transactional leadership.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP:
i.TRANSACTIONAL LEADERSHIP
• #he basis of transactional leadership is:
i. A transaction or
ii. $%change process between leaders and followers.
• The transactional leader:
a. &ecognies followers’ needs and desires and
b. Clarifies how those needs and desires will be satisfied
c. 'n e%change for meeting specified ob(ecti)es or performing certain duties.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP:
i.TRANSACTIONAL LEADERSHIP
• Followers recei)e rewards for job performance
• Leaders benefit from the completion of tasks.
• Transactional leaders focus on the present and excel at
+eeping the organization running smoothly and efficiently.
• #hey are good at traditional management functions such as:
• planning and budgeting
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP:
i.TRANSACTIONAL LEADERSHIP
• #ransactional leadership can be quite effecti)e.
• -y clarifying expectations leaders help build followers’
confidence.
• atisfying the needs of subordinates may impro)e
producti!ity and morale.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP:
i.TRANSACTIONAL LEADERSHIP
• Transactional leadership:
i. 'n)ol)es a commitment to 0follow the rules.
ii. aintain stability within the organiation rather than
promoting change.
• Transactional skills are important for all leaders.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
• Transformational leadership is characteried by:
• #he ability to bring about significant change.
• Transformational leaders ha)e the ability to lead changes in:
i. #he organiation’s )ision
ii. strategy and
iii.Culture as well as promote inno)ation in products and
technologies.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
• Transformational leadership focuses on:
intangible qualities such as:
i. )ision
ii. shared )alues and
iii.ideas in order to build relationships
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
• #ransformational leadership tends to ha)e four
dimensions:
i. Charisma
ii. 'nspiration
iii.'ntellectual stimulation and
i). 'ndi)idualised consideration.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
i. "harisma
6ro)ides )ision and sense of mission and instils pride
along with follower respect and trust.
7or e%ample the late 8te)e 9obs of Apple showed
charisma by emphasising the importance of creating the
acintosh as a radical new computer and
8howed it again and again when he focused on products
li+e the i6od i6hone and i6ad
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
ii. #nspiration
Communicates high e%pectation.
;ses symbols to focus efforts
$%presses important purposes in simple ways
7or e%ample &ichard -ranson the C$! of
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
iii. #ntellectual stimulation
6romotes intelligence rationality and careful problem>
sol)ing.
7or e%ample your boss encourages to loo+ at a difficult
problem in a new way.
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1. TRANSACTIONAL VERSES
TRANSFORMATIONAL LEADERSHIP
ii. TRANSFORMATIONAL LEADERSHIP
i!. #ndi!idualised consideration
6ro)ides personal attention treats each employee
indi)idually and coaches and ad)ises
7or e%ample your boss drops by and ma+es remar+s
reinforcing your worth as a person.
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2. TRANSFORMATIONAL LEADERSHIP DIFFERS
FROM TRANSACTIONAL LEADERSHIP IN FOUR
SIGNIFICANT AREAS
Transformational leadership:
$. %e!elops followers into leaders
7ollowers are gi)en greater freedom to control their own
beha)iour
Arouses in followers an awareness of problems and
issues
Helps people loo+ at things in new ways so that
producti)e change can happen
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2. TRANSFORMATIONAL LEADERSHIP DIFFERS
FROM TRANSACTIONAL LEADERSHIP IN FOUR
SIGNIFICANT AREAS
Transformational leadership &contd'
(. )le!ates the concerns of followers from lower*le!el physical
needs ?such as for safety and security@ to higher le!el
psychological needs ?such as for self>esteem and self>actualisation@
ower le)el needs are met through wages safe wor+ing
conditions.
6ays attention to each indi)idual’s needs for growth andde)elopment
#ransformational leaders change followers so that they are
empowered to change the organisation.
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2. TRANSFORMATIONAL LEADERSHIP DIFFERS
FROM TRANSACTIONAL LEADERSHIP IN FOUR
SIGNIFICANT AREAS
Transformational leadership &contd'
+. #nspires followers to go beyond their own self*interests for the good of the group
,oti!ate people to do more than originally expected
a+e followers aware of the importance of change goals
and outcomes.
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2. TRANSFORMATIONAL LEADERSHIP DIFFERS
FROM TRANSACTIONAL LEADERSHIP IN FOUR
SIGNIFICANT AREAS
Transformational leadership &contd'
7ollowers admire these leaders
=ant to be identified with them
Ha)e a high degree of trust in them
,oti!ates people:
i. #o belie)e in the need for change and
ii. -e willing to ma+e personal sacrifices for the greater purpose.
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2. TRANSFORMATIONAL LEADERSHIP DIFFERS
FROM TRANSACTIONAL LEADERSHIP IN FOUR
SIGNIFICANT AREAS
*. 6aints a !ision of a desired future state and communicates it
in a way that ma+es the pain of change worth the effort
ignificant role of a transformational leader is to:
i. 7ind a )ision for the organisation that is significantly better
than the old one
ii. $nlist others in sharing the dream
"hange can only occur whenB
a. 6eople ha)e a sense of purpose and
b. A desirable picture of where the organisation is going.
=ithout )ision there can be no transformation
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REFERENCES
• =ood 9. effane &. 7romholt . =eisner &.
orrison &. and 8eet 6.8. ?21"@ !rganisational
-eha)iour: Core concepts and applications "rd
Australasian $dition 9ohn =iley and 8ons Australia.
• Daft &.. ?2,@. #he leadership e%perience 'nternational
edition #homson>8outh =estern Canada
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