Transactional Leadership: Effective Leadership Style

Transactional leadership is the transaction or exchange that takes place among leaders, colleagues and followers. This exchange is based on the leader discussing with others what is required and specifying the conditions and rewards these others will receive if they fulfill the requirements.

Transactional leaders motivate followers and employees to do more than they original intended and rewarding there performance.

True transactional leadership raises the level of moral maturity of those whom they lead.

They convert their followers into leaders. They broaden and enlarge the interests of those whom they lead. They motivate their associate, colleague, followers, clients and even bosses to go beyond their individual self-interests for the good of the group, organization or society.

Transactional Leaders address each follower’s sense of self-worth in order to engage the follower in true commitment and involvement in the effort at hand.

Transactional leadership motivate others to do more than they original intended and often even more than they thought possible. Such leaders set more challenging expectations and typically achieve higher performances.

Transactional leader also focuses on the role of supervision, organization and group performance. Here the leader attends to the need and development of his followers as they give their best and attend to business.

Principles of transactional leadership

The transactional leader does more with colleagues and followers than set simple exchange or agreements. The transactional leaders motivate, inspire and develop his followers towards a common goal and are rewarded financially.

First, the transactional leader helps his followers understand why they should go towards the vision of the organization, not just to make sense of what they are being asked to do, but it also helps them stay focused.

Second, the transactional leader inspires the followers with challenging and persuasion that provide meaning and understanding.

Third, the transactional leader is intellectually stimulating, expanding the follower’s use of their abilities. He is focused on empowering and developing his followers to achieve greater result.

Forth, the transactional leader motivates and inspires his employees by providing meaning and challenge to their work.

Fifth, the transactional leader displays team spirit. He gets the followers involved in contributing to the common goal. The leader clearly communicates expectations that followers want to meet and demonstrate commitment to the goals and the shared vision.

Sixth, the transactional leader stimulates follower’s efforts to be innovative and creative by questioning assumptions, reframing problems and approaching old situation in new ways. Creativity is encouraged. Followers are encouraged to try new approaches and their ideas are not criticized if they differ from the leader's ideas.

Seventh, the transactional leader pay special attention to each individual's need for achievement and growth by acting as a coach or mentor. Followers and employee are developed to successively higher levels of potential. Here new learning opportunities are created along with a supportive climate. Individual differences in terms of needs and desires are recognized.

Finally, the transactional leader rewards and disciplines a follower depending on the adequacy of the follower’s performance. Here the leader rewards the followers or employees performance. They are rewarded with a promotion and financial rewards. They are rewarded for good performance.


Transactional Leadership is the exchange that takes place among leaders, colleagues and followers. He motivate others to do more than they originally intended and often even more than they thought possible. They set more challenging expectations and typically achieve performance higher performance. Transactional leader have more committed and satisfied followers.

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