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International Journal for Quality research
UDK- 378.014.3(497.11)
Short Scientific Paper (1.03)
TRANSACTIONAL AND TRANSFORMATIONAL
1) LEADERSHIP: DEVELOPMENT THROUGH CHANGES
Srđan Nikezić
Sveto Purić2)
Jelena Purić3) Abstract: The success and rewarding are mostly expressed in
business performance at the end of the year. Transactional and
1) Faculty of Science, transformational leadership as a new paradigm of quality
University of Kragujevac, effects on creation of roles and processes in the organization.
Serbia From the leaders are expected to use leadership as a process
srdjan_nikezic@yahoo.com of ensuring the long-term goals of the organization, especially
2) Faculty of Law, University in turbulent competitive environment. Therefore, this paper
of Kragujevac, Serbia points out the impact of leadership competencies through
svetopuric@yahoo.com transactional and transformational leadership, characteristics
3)Faculty of Economics, and processes that show different levels of participation of
University of Kragujevac, transformation and transactional leadership of organizations.
Serbia
jecapuric@yahoo.com Keywords: leader, followers, changes, transactional and
transformat leadership, organization
MacGregor Burns in 1979. Burns made a
1. Introduction distinction between ordinary (transactional)
leaders, who have ensured the followers loyalty
Theory and practice show that transactional through rewards, and extraordinary
leadership is a necessary, evolutionary path toward (transformational) leaders, which focused on the
transformational leadership from the relatively essential needs of followers. The idea was further
stable to a period of business in a turbulent developed by Bernard Bass who was considering,
environment, which is characterized by many unlike Burns's, that transformational and
unknowns. For transformational leadership is transactional leaders are part of the same
characteristic interaction of different social actors, continuum of leadership that can not be
initiative, efficiency and effectiveness, readiness considered separately. [18]
for change and variety of strategic choices in
accordance with the requirements of the 2. Transactional leadership
environment and the perception of new vision and
business goals. It is an evolutionary path that The concept of transactional leadership was first
coexists with the changes in the environment and mentioned by Max Weber in his socio-economic
transformational leadership inevitably occur as a considerations of the organization. Twenty-seven
complex process based on the individual vision, years after his death and publishing a reprint of his
courage and willingness to learn, openness to book, academic and professional audience accepts
followers and values that include better and more his definition of leadership. [1] Max Weber first
efficiently, based on the radical changes in the described transactional leadership style and his
organization and the environment. basic facts are accepted by Bernard Bass in 1981.
Cox identified two basic types of leadership: Great influence on him had made James
transactional and transformational. [17] McGregor Burns-a [2], whose study of leadership
Differences between transactional and was the cornerstone for further development of
transformational leadership was first formulated leadership as a new area.
by Downton, but the idea is worked out by James
Vol 6, No. 3, 2012 285
rationality and economic activity. [1, 335]
2. Bureaucratic Examples include: a feudal kingdom in China,
(Transactional) Egypt, Africa, the Roman Empire and others.
Bureaucracy is "the
THREE OPTIONS exercise of control on • Charismatic leader is characterized by
FOR THE Capitalist the basis of dedication, illumination, and heroism. Followers,
Entrepreneur knowledge: (p. 339). It on the basis of personal trust in the leader and his
is the stuff of rational intention, consciously accept to belief in his
legal hierarchical charisma, vision and mission. He is for them like a
power, the warrior, prophet or a visionary. Because of
Bureaucratic leader. consideration that charisma is God's gift, leader
1. Charismatic being treated in such a way. Weber watched
(Transformer) 3. Traditional charismatic leaders as: heroes in the war, leaders
An individual personality (Feudal) of the hunt, the wise men or shamans, and also as
set apart form ordinary Traditional is an founders of religions like Christ in Christianity or
people and endowed with arbitrary exercise of Muhammad in Islam. Thus, one type of charisma
supernatural, superhaman Sultan power bound to is a hereditary monarchy, the second patriarchal
powers, and heroic loyalty, favoritism, and authority, the third charismatic religious authority,
qualities. In short part politics. It is stuff of and the fourth military heroes.
Hero, and part Superman/ Princely leadership. Weber argued that no one of three leaders types
Superwoman. occur an ideal form. [1, 329-333] Also argued that
there can be a combination of bureaucratic and
Figure 1: Max Weber's (1947) Model of charismatic leadership.There are a few strongholds
Transaction and Transformation Leadership in his conception of Leadership:
Authority • Weber's model of leadership is dynamic and
allows the transfer of leadership from one form to
Max Weber has defined three types of leadership another. There is no ideal type of leadership
and leaders: • The model is cyclical, that is an unstable
Bureaucratic - transactional leaders, form of charismatic, bureaucratic form can
who earns leadership through normative rules and become a hybrid of the monarchy at the top.
regulations, strict discipline and systematic • Model has situational character, because
control. Obedience of followers is based on Weber explained the economic and social
rational values and rules, and also on established conditions that support the selection of a particular
agreements. Follower is limited to the obligations type of leadership.
and controls which are set him. Wages are fixed • Weber stands for the transformation of
and ranked in a hierarchy. Coercive measures are charisma into a democratic approach to leadership,
clearly defined and their use is subject to certain which respect the voice of followers. The new
conditions that are already established. The charismatic authority is based on legitimacy and
technical side of follower has big importance and public recognition. Weber's opinion is that anti-
forms the basis for the selection of administrative authoritarian direction of the transformation of
staff. There is no right of appeal. Capitalism, charisma present the way towards greater
according to Weber, encourages the development rationality. [1, 390]
of bureaucracy, even bureaucracy exist in socialist Bernard Bass, using Burns basis of a
systems. [1, 339] transactional leader, start with characteristics of
Traditional leaders believe in the behavior and situation as basic level of exchanges
legitimacy of governance on traditional way. between leaders and followers, so that all
Personal loyalty and faithfulness of followers participants get something they want. He
dominant in this kind of leadership. The leadership identified two types of leadership: transactional
of the organization is characterized by and transformational.
arbitrariness and iracionalnoscu instead of Transactional leadership is based on classical
principles of exchange with followers who are part
286 K.Ganguly
of interactions and therefore are rewarded for 4) Laissez-Faire dimension, which is a form of
meeting pre-defined standards and performance. leadership that provides the possibility of freedom
Transactional leadership is focused on maintaining in the choice of goals and behavior of
the status quo, so transactional leadership present organizational participants. It is not real leadership
traditional approach of leadership. [3] First Bass's style, because of impact of social actors, whose
research of transactional and transformational activities were not coordinated, limited or
leadership is related to the year of 1954 and 1960, formalized. The leader avoids responsibility for
when the practical examples found correlation decision-making and because of that he often
between successful leadership and perceptual creates inefficient and unprofitable organizational
flexibility. He also came to the conclusion that relationships. [8] Assumptions of transactional
transactional leaders can be successful in a short leadership are:
period of time, but that they must focus on the • employees are motivated leader through rewards
changes, if you want to continue to retain a and punishments,
leadership position.[4, 5] Transactional leadership • followers receive a directive from the leader,
style commonly used in conditions where the wich mast be respected through production
focus of leaders focused on the basic process process,
control, organization and short-term planning. • there is no self-motivation, but the follower are
Examples for transactional leaders are American controlled by leader during the manufacturing
and French politicians McCarthy and de Gaulle. process.
Transactional leadership is utilized in the economy Transactional leaders are focused on short-
after the Second World War until the 70's, because term goals, standards, procedures, rules and
the business climate, particularly in the United control. Creativity, vision and generating of new
States, provided high level of stability that most ideas are not represented. The efficiency (cost
organizations did not felt the need for change, and reduction) is the key variable of leadership
consequently for the leadership, as the power that competencies. The left side of the brain (rational
leads to changes. [6] Transactional leadership behavior), completely dominated, so the right
involves motivating and directing followers, brain (emotional intelligence) is totally excluded
appealing to their own interests. The power of the from leadership behavior. Followers are motivated
leader comes from formal authority and only by rewards and punishments, and the utility
responsibility in the organization.The main task of over money dominates the leader-followers.
the followers to respect the instructions of leaders. Transactional leadership focuses on the basic
The leader provides rewards and punishments in functions of management, control, organization
the organization of its legitimacy. Transactional and short-term planing.
leadership is, in essence, oriented on monitoring Transactional leadership is based on the
organization, processes and outcomes in the assumption that employees are motivated by the
market. [7] The interpersonal relationships best system of rewards and punishments.
between leaders and followers have a four Transactional leaders are focused on standards,
dimensional approach: policies and procedures, as we have already said.
1) The possibility of reward, as a result of well- They have a very narrow focus and do not
performed tasks and achieved goals that followers encourage the creativity and new ideas. This style
are expected to successfully completed the of leadership works best when organizational
process. Goals must be specific, measurable, problems are simple and clearly defined. [9]
possible, realistic and timely manner (SMART). Inflexibility of leadership is a characteristic of this
2) Actively engaging leaders in managing, which model, so any attempt to change this leadership
followed the work of his followers, gives style is difficult and almost unsuccessful, because
consideration to any deviation from established the leadership style is part of human person, his
standards and procedures by taking corrective personal characteristics and that is something
measures in case of errors. unchangeable. [10]
3) Passive engagement leader involves the leaders
in the process only when standards are not met, or
performance are not achieved.
Vol 6, No. 3, 2012 287
3. Transformational Leadership and the need to radically change their former way
of leadership. Second, the recent theoretical base
As a term, transformational leadership first of leadership, which is based on an analysis of
was mentioned in 1973rd, in the J. V. Dowton's personal leader characteristics and behavior in
sociological study,. [11] Transformational different situations, not taking into consideration
leadership style is directly related to charismatic certain, quite unusually, quality of leader. These
leadership approach, since Max Weber's time. new qualities demanded a new theory or a new
Robert House in 1976th , start approuching the concept of leadership. It is the concept of
traditional literature on charisma and charismatic transformational leadership. The Figure No. 2
leader, and concluded that through the selected shows the key characteristics of transformational
literature from social psychology can be explaned leader. [16]
on a relevant way the concept of charisma. House Creativity
has considered a range of topics related to Team orietation
charisma, including the charismatic effects, Respect
characteristics of charismatic leaders, their Coaching
behavior, and situational factors that influence on Responsibility
appearance and effectiveness of charismatic Confession
leaders. Based on these analyzes he was developed
speculatively theoretical explanation of charisma Figure 2: The key attributes of transformational
starting from psychological forms, including a less leader [16]
sociological and political considerations. [12]
Musser was observed a charismatic leader as Over the years, Bass's MLQ (Multifactor
holder of double function: he seeks to wake up Leadership Questionnaire), known as FRLT (full-
feelings to followers for ideological commitment range leadership theory) was redefined. New
to the goals and devotion to his own personality. investigations of Burns-Bass's basic postulates of
Which of these two objectives will be dominant transformational leadership theory were developed
depends on the motives and needs of the leader. first by Conger and Kanungo, fand than by
[13] Conger and Kanungo give five attributes Kouzes and Posner. [19] Some researchers have
(characteristics) of charismatic leaders: tried to extend this concept of the model by
• vision and articulation, proposing introduction of so-called "servant
• responsibility for Environment, leaders" and "transcendent leaders", that enable
• understanding followers needs, followers to develop new knowledge (rational and
• personal risk taking and transcendental). [20, 21] Nevertheless, based on
• unconventional behavior. [14] available information from the industry, Bass's
MLQ model / FRLT remained empirically most
James MacGregor Burns has made a valid test of theories of leadership in practice. [22]
fundamental distinction between transactional and According to Burns transformational leader
transformational leadership. [2, 15] recognizes the needs or demand of potential
Transformational leaders seek to change existing followers and articulating their motives for trying
patterns, values, beliefs and goals, and create new to meet their requirements, while also engaging
ones that encourage the greater commitment. followers as complete person. The result of such
Intense commitment to the concept of relationship was mutual stimulation, which
transformational leadership is the result of at least ultimately can be explaned on convert follower
two tendencies. First, many large companies such into a leader and leader into moral agents. Bass
as IBN, GM, Ford and others, started a identified four components of transformational
comprehensive program of transformation and leadership:
change that had to be achieved in a relatively short Charisma, which is identified with the
period of time, because in early 80-ies of last followers' perceptions of the leader as an
century business world has become more idealized, confident, charismatic leader who
dynamic, competitive and volatile. Many, by then captivates with confidence and attitudes.
a successful company, were faced with the crisis Followers of such leaders are admired as a model
288 K.Ganguly
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