Transformational and transactional leadership both have a common interest and that is developing, motivating and strategically empowering a group of followers to fulfill the company vision and to meet the organizations primary objective. Another commonality of the two leadership styles is that each leader is a visionary, each type of leader has the potential of predicting the end result and determining what it will take to reach the desired outcome. Both leadership styles consists of developing a strategic action plan, “create an ideal of the organization and its culture, the aforementioned leadership styles also involves the act of defining the organizational philosophy that succinctly states the vision, develops the necessary programs to accompany the vision, and integrate policies that put the philosophy into practice within the organization’s unique context and culture.” (Sashkin, 1989).
In a sense, a transactional leader is one who thrives on bargaining with followers in order to obtain adequate results. Some theorist believe, that in order for a transactional leaders believe to obtain success, the leader must continuously develop enticing offers and competitive promotional packages as a means to retain employees and increase productivity, in which case a transactional leader may utilize a “quid pro quo” philosophy (i.e. this for that) in order to reach the desired outcome of project fulfillment. For example, a leader may require followers to meet the specified quota by a certain deadline, upon completion of services rendered, the followers and/or subordinates may be rewarded by receiving incentives, monetary compensation, and/or some additional perks that would express the organizations gratitude for an employee or group of employees commitment to providing top-tier level job performances. In addition to increased productivity or competitiveness within an organization being the driving force behind the motivation of recompense of reward, the fundamental element of a transactional leader is engaging in the exchange method of conducting interoffice transactions that enables the organization to become more effective and efficient during the day-to-day operations.
In contrast, a transformational leader is one who works towards uplifting his/her current staff members and motivating them to exceed consumer and employer expectations and to fulfill the necessary obligations for the greater good of the company, this type of leader has the ability to “shape, reformulate, and alter the motives and values of his/her followers.” (Wren, 1995). A transformational leader influences the best moral and ethical conduct of employees, thus appropriating professional demeanor and ethical moral conduct. A transformational leader establishes innovative concepts that may enable the organization to transition from one mode of functionality to another mode of innovation, technological advancements, and growth expansion in order to meet the overwhelming demands within an organizations external environments. This type of leader gradually implements change initiatives and restructures the current business model in regard to the leader/follower relationship patterns in which case the overall objective of a transformational leader is to create and develop new leaders as opposed to maintaining the same stagnated leader/employee bound relationship that lacks the potential for real growth. For instance, an individual who works as a public area specialist of a hotel functions under a supervisor who refuses to provide an employee with the option of climbing the corporate ladder but instead wants the employee to operate under the same mode of functionality, thus creating a hostile work environment for the employee and causing him/her to become emotionally and mentally detached from his/her current position for the reason that he/she is unable to obtain an opportunity for real growth and may even become “burned out or mentally exhausted with the current organizational circumstance.” In essence, a transformational leader is one who provides mentorship, organizational revitalization efforts, and training development processes in order to carry on the organizations legacy, brand, and overall vision/mission through the utilization of a new generation of young leaders with innovation that exceeds organizational expectations. I find that in addition to transformational and transactional leadership, there is also a such thing as a transformational and transactional organization, that thrives on many of the tactics practiced within the realm of an effective leadership style.