Orange And Blue Transactional Leadership Strategic Analysis

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What is Transactional Leadership?

Transactional Leadership was first described by Hollander in 1978. Hollander believes that leadership behavior is a transaction process in which the leader and the subordinates satisfy each other under specific circumstances, that is, the leader guides and motivates the subordinates to accomplish organizational goals by means of clear tasks and role requirements.

Characteristic of Transactional Leadership

The characteristic of transactional leadership is to emphasize exchange, and there is a kind of contractual transaction between the leader and his subordinates. In exchange, the leader provides remuneration, rewards in kind, promotion opportunities, honors and so on to his subordinates to meet their needs and desires; In return, the subordinates obey the orders of the leaders and complete the tasks assigned by them.

The intrinsic motivation behind all transactional leadership is the achievement of stable and sustainable returns. The following features can be seen in a transactional leader's organization:

  • Clear boundaries: roles and functions, technical processes, margins of control, decision authority, and spheres of influence are clearly delineated, and all factors and their interactions are managed and controlled to achieve desired business results.

  • Order in Order: For transactional leaders, everything has a time requirement, a place requirement, and a process that makes practical sense. By maintaining a highly ordered system, transactional leaders are able to achieve more consistent results over time and systematically.

  • Abiding by rules: Transactional leaders attach great importance to rules and set specific operating standards and methods for every level of business operation. Any deviation from procedures, methods and processes is regarded as a problem to be solved and eliminated. In other words, the results of the work must be predictable, with no room for surprises.

  • Mandatory control: transactional leaders hate chaotic and uncontrollable environments. They try to bring order to the organization. Therefore, their leadership style is often very strong, and there is often a lack of compassion within the organization.

In the practice of enterprise management, most managers will have transactional leadership behavior in varying degrees, because it can effectively improve work performance. But, as the saying goes,

"If you only have a hammer in your toolbox, you will see every problem as a nail."

Business leaders should not rely primarily or solely on transaction leadership to influence others. If so, you can be sure that the internal environment will be filled with corporate politics, special treatment, sycophancy and ostracism.

Transactional Leadership Template

Here is a Transactional Leadership template created with Visual Paradigm's online strategic analysis tool. You can customize this template by modifying the text, color and font, and use it in your presentations and reports.

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