Another stream of research has focused on differentiating transformational leaders from transactional leaders. Most of the leadership theories presented for instance, the Ohio State studies, Fielder’s model and path goal theory have concerned transactional leaders. These kinds of leaders guide or motivate their followers in the direction of established goals by clarifying role and task requirements. Transformational leaders inspire followers to transcend their own self interest for the good of the organization and are capable of having a profound and extraordinary effect on their followers. Andrea Jung at Avon, Richard Branson of the Virgin Group, and Maureen Baginski are all examples of transformational leaders. They pay attention to the concerns and developmental needs of individual followers they change followers’ awareness of issues by helping them to look at old problems in new ways; and they are able to excite, arouse and inspire followers to put out extra effort to achieve group goals. The below point identifies and defines the characteristics that differentiate these two types of leaders.
Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments.
Management by Exception (active): Watches and searches for deviations from rules and standards, takes correct action.
Management by Exception (passive): Intervenes only if standards are not met.
Laissez Faire: Abdicates responsibilities avoids making decisions.
Idealized influence: Provide vision as sense of mission, instills pride gains respect and trust.
Inspirational motivation: Communicates high expectations uses symbols to focus efforts, expresses important purposes in simple ways.
Intellectual Stimulation: promotes intelligence, rationality, and careful problem solving.
Individualized Consideration: Gives personal attention treats each employee individually, coaches, advises.
Transactional and transformational leadership shouldn’t be viewed as opposing approaches to getting things done. Transformational and transactional leadership complement each other but that doesn’t mean they’re equally important Transformational leadership builds on top of transactional leadership and producers levels of follower effort and performance that go beyond what would occur with a transactional approach alone. But the reverse isn’t true. So if you are a good transactional leader but do not have transformational qualities, you will likely only be a mediocre leader. The best leaders are transactional and transformational.
Full Range of leadership Model: Laissez-faire is the most passive and therefore the least effective of the leaders behaviors. Leaders using this style are rarely viewed as effective. Management by exception – regardless of whether it is active or passive is slightly better than Laissez-afire, but it’s still considered in effective leadership. Leaders who practice management by exception leadership tend to be available only when there is a problem, which is often too late. Contingent reward leadership can be an effective style of leadership. However leaders will not get their employees to go above and beyond the call of duty when practicing this style of leadership. Only with the four remaining leadership styles which are all aspects of transformational leadership – are leaders able to motivate followers to perform above expectations and transcend their on self interest for the sake of the organization. Individualized consideration, intellectual stimulation, inspirational motivation and idealized influence all result in extra effort from workers, higher productivity, higher morale and satisfaction, higher organizational effectiveness, lower turnover, lower absenteeism and greater organizational adaptability. Based on this model, leaders are generally most effective when they regularly use all of the four transformational behaviors.
How Transformational leadership Works: in the past few years, a greater deal of research has been conducted to explain how transformational leadership works. Transformational leaders encourage their followers to be more innovative and creative. For example, Army Colonel Leonard Wong found that, in the Iraq war, the army was encouraging reactive instead of proactive thought compliance instead of creativity and adherence instead of audacity. In response Colonel Leonard Wong is working to empower junior officers to be creative and to take more risks. Transformational leaders are more effective because they themselves are more creative, but they are also more effective because they encourage those who follow them to be creative too.