Liturature Review: Transactional vs Transformational Leadership

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RMIT International University Vietnam
Bachelor of Commerce Program

INSTRUCTOR: M. BELINDA PRIBIL

TRANSACTIONAL VESUS TRANSFORMATIONAL LEADERSHIP

Student name: Nguyen Song Thien Ha Student ID: S3168995

TABLE OF CONTENTS

INTRODUCTION 4

BODY5
Literature review 5
1. Leadership
2. Transactional leadership5
3. Transformational leadership6
Transformation process5
4. Transactional leadership versus transformational leadership6 5. Effective and situational aspects of transactional and
transformational leadership8
Reflection9
Action plan 11
1. Learning Activities 11
2. Detailed Action Plans13

REFERENCES 16

INTRODUCTION

Leadership is a broad and controversy term. This report focuses on transactional and transformational leadership. Each form has its own characteristics which can be advantages in some situations but can be disadvantages under other cases. It depends on the environment, on the leader’s attitudes, the followers’ attitudes and the expected relationship between them. Thus the differences between them will be theoretically clarified in this report to serve for deciding which leadership form is more appropriate. An action plan and a writer’s reflection on the theory are also attached after the literature review.

LITERATURE REVIEW
1. Leadership

When mentioning leadership, what often come to people minds are an individual leader, extreme power, high responsibility, orders and respect from others. In most documentation, leadership is considered to be a broad term that involves leaders, followers, influence process, goals, tasks, people and changes. “The world is changing, and so is our concept of leadership” (McShane S & Travaglione, T 2007). They informed that a “consensus” has been reached from thirty eight countries that “leadership is about influencing, motivating and enabling others to contribute towards the effectiveness and success of the organizations of which they are members.”

However, there is no “universal” definition on leadership, Lussier and Achua argued, it depends on the purpose of the study. This report is focused on transactional and transformational forms of leadership. Thus, it turns the focus more on the leaders and the relationships between them and the above component factors of leadership.

According to Cox (cited in Hay, I 2006) leadership can fall into one of the two categories, either transactional or transformational.

2. Transactional Leadership
From the view points of McShane & Travaglione, transactional leadership focuses on leaders’ behavior: “managing” – including controlling, motivating, organizing, planning- using reward systems and adopting leaders’ behaviors to improve employee performance and satisfaction.

A clearer definition in term of the transitory relationships between leaders and followers is provided by Bass (cited in Boerner, S et al 2007). The concept was defined as an “economic exchange” of tangible rewards where leaders and followers enter a “contractual arrangement” that benefits both leaders and followers.

3. Transformational Leadership
Slocum, JW & Hellrielgel D said that transformational leadership involves “anticipating future trends”, “inspiring”, “developing” self-leadership and “embracing new vision of possibilities” while Lussier et al focus transformational leadership on the “transforming abilities” of the leaders who move and change things “in a big way”. On the other hand, as McShane & Travaglione viewed transactional leadership as “managing”, they defined transformational leadership as “about ‘leading’ – changing the organization’s stratergies and culture so that they have a better fit with the surrounding environment”.

However, Mcshane & Travaglione get it clear and most persuasive when concluding that a leader is...
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