Transactional Leadership Theory

Leadership is inspiring others to be their best selves. It is capturing other people with energy, words, and voice and rallying them around a central ideology, vision, or mission. Listening to others and hearing what they are saying, then asking questions that challenge them to think differently, see new perspectives and gain new insights. Good leadership is about connecting with human beings and encouraging people to trust their gut, pursue their interests and be better than before. Also, it is about taking responsibility for our actions, owning our successes and failures, and reminding others to do the same. Conveying a message of trust, support, and guidance, while remaining authentic, empathetic, and compassionate. There are many reasons why diversity in leadership is important.

First and foremost, organizations with diverse leaders tend to be more successful. Diverse leadership teams bring various perspectives and experiences to the table, which can lead to better decision-making. They are also better equipped to relate to and understand the needs of a diverse customer base. In today's increasingly globalized economy, businesses need leaders who can effectively operate in diverse environments and cultures.

Leadership: A Quantitative View

Transaction leadership is characterized by goal setting, execution, defined authority, and a reward mechanism that leverages employees' extrinsic motivation to perform at their best. The preset examples act as targets for the employees. It is also known as managerial leadership. Transactional leadership is used to motivate employees for the short term with its strict reward and punishment system. It is more like management-controlled organizations with a high preference given only to management decisions. Such leaders must make aims and particular directions for their requirements for their workers. Give fruitful responses on the given work. Focus on developing the productivity of pre-established work ethics and process and provide importance for present rules instead of making manipulation in it. Making new approaches that will ultimately affect the functioning of the organization. By giving the right direction to false outcomes of the desired result. For example, a typical employment contract is a transactional relationship. The boss pays you a salary for you to do your job. You get fired if you fail to perform in your job. You get a bonus, increment, and promotion if you do extremely well.


The managerial leaders give more attention to the comprehensive and step-by-step achievement of aims and basic regulations. The attempt to be more innovative is always neglected ad ignored as it reduces the time efficiency of the task given. Such leadership will function well when the professional tasks are basic and easily Assigned. These type of superiors aims to give value and pay attention to the design of the task, which does not suites the current aim of the organization. Such types of leadership are found to be efficient in accompanying productivity resolutions that are aimed at reducing wages or increasing work ethics. Transactional leaders tend to be highly directive and action-oriented, and their relationship with the followers tends to be transitory and not based on emotional bonds. This type of guidance supposes that employees could easily be prompt with simple rewards. The employer and employee only have single relation, which is in, most times, their salary and money.


In such leadership, the prize and penalization are possible upon the employee's work. The two-way bond between the employer and employee is to give and take in exchange which will eventually decide their punishments or reward. Sometimes this type of leadership tends to fail in a corporation as it is more inclined to regulation and anticipation. The whole point is merely an aim to be achieved, or the consequences will be tough. They are more interested in the preservation of the team. The task they are looked upon to and the result awaiting them accordingly. Managerial leadership has pros and cons varying in different situations and requirements.


It rewards the employees who, on their own will, accept the regulations and work accordingly as told by their employers. People provide an unmistakable system and replicate many work cultures, and people tend to achieve their aim step by step. There is set communication between employers and employees about the awards and punishments depending upon the quality of their work.


The disadvantages of such leadership are that it only awards the employee quantitatively, like salary or Output. The imagination and innovation of the employee are not given importance as they are not required for the giver type of task. It does not reward the employee's capability to think and initiative.


Transactional leadership will merely have successful targets aiming for a Non-linear and general type of work. These leaders are responsible for keeping the employer as they are forever. They are more concerned with maintaining the normal flow of operations. It is important and useful in some situations! Transactional leadership is often denigrated in popular literature, but it is the appropriate leadership style in many contexts. The managerial leadership skill can be adjusted to the work environment, which means adjusting one to the new environment is the foundation of performing one's leadership. For pros, it will improve the working ability for sure. For cons, it will force one to change your adaptability to a different working environment.