LIBERTY UNIVERSITY SCHOOL OF DIVINITY
Assignment Title: Transactional Leadership and Transformational Leadership
Course: CHMN 699 - Internship
Student: Kristine Sage
Date: January 29, 2022
Professor: Dr. Joel Breidenbaugh
Transactional Leadership and Transformational Leadership
A number of leadership approaches emphasize the exchange process in which leaders help
followers accomplish objectives. Such a role has been labeled transactional leadership, named
for the transaction or exchange that occurs—the subordinate exchanging work for the leader’s
granting of reward. Transactional leadership generally uses the concepts in trait, behavior, and
situational styles of leadership. Studies of these theories focus on task and relationship skills,
sometimes as an either/or factor, or as behavior tendency on a task-/relations-oriented
continuum.
Transactional leaders help the subordinate identify what must be done to achieve the goal, as in
the several elements of the path-goal model. Though the exchange process may sometimes
appear simplistic, as in a paycheck for work, theories of transactional leadership can be complex
and include the leader helping the subordinate identify what must be done as well what might
motivate the follower to succeed.
Two main elements of transactional leadership style that are generally referred to in the
leadership literature:
1) Contingent reward. This is the belief that a follower’s reinforcement is contingent
on accomplishing objectives and will result in higher performance and satisfaction. This
belief that reward results from accomplishing objectives, while widely held, has not
always been proven in studies. A national sample of US workers showed that people do
not believe that better pay is contingent on better performance, even though they would
like it to be (Yanklovich & Immerwahr, 1983).
2) Management-by-exception. This concept sees the leader only getting involved with
the follower when there is an exception—when the agreed-upon objectives are not being
accomplished. The influence in leader-follower exchanges such as these are likely to be
minimal, especially in a passive form which only gets involved when there are problems.
The active form of management-by-exception watches follower performance more
closely, yet only corrects without any other formative feedback.
Implications for church leadership
The two main notions in transactional leadership are not foreign to the Bible and Christian
theology. “Contingent reward” is rooted deep in Christian teaching. While Christians believe that
salvation is of faith alone, there is a common belief that God grants other rewards for faithful
service. And, many Christians believe God Himself is the best example of “management by
exception,” intervening in natural affairs only when the covenant with His people is being broken.
Therefore, while most Christians reject the notion that we make any sort of an exchange
or transaction for our salvation, they would accept some sort of a rewards theology for fidelity
and faithfulness. These notions make Christians especially open to transactional modes of
leadership. Some of the implications of transactional leadership theory for church leaders may
be:
1. Church leaders seldom offer financial rewards to laborers in the church setting (except in
the case of paid professional staff). The rewards offered are often more intrinsic,
intangible, and sometimes delayed than the simple labor-paycheck model. However, the
church may not be that unique in this, for many employees do not rely primarily on
financial rewards in their work, but use similar rewards as are offered by church work:
personal satisfaction, meaningful work, contribution to something lasting, making a
better world. Church leaders must recognize that in offering these rewards they may not
offer any greater reward than non-religious organizations or companies.
2. Christianity offers eternal rewards. Therefore, church leaders should offer rewards that
move to the eternal level. The souls of man and women are eternal where all other
rewards are temporal. Church leaders who set their follower’s sights on eternal values
can offer rewards that non-religious organizations can’t compete with.
3. Church work should be postured as rewarding work. It is no shame to motivate people
by reminding them of the great rewards they will receive by volunteering to work in the
nursery, or go on the youth retreat as a counselor. While few Christians may actually
work for the reward, knowledge of the rewards may provide additional motivation for
volunteers in the church. Thus, church leaders should intentionally outline the rewards
and benefits of church work and intentionally sell the value of church volunteering as part
of their comprehensive volunteer recruitment strategy
Transformational Leadership
Since the publication of James McGregor Burns' book, Leadership, in 1978, viewing the leader
as transformational rather than transactional became the focus of a great amount of leadership
research. Rather than exchanging reward for achieved goals, transformational leadership is a
comprehensive approach that strives to change or transform followers to transcend their own
short-term needs for their longer-term self-development, the good of the group, the organization,
and society. It is a lofty goal.
Burns (1978) believed that leaders were either transactional or transformational. You were either
one or the other, and transformational was better. However, seven years later Bernard Bass
(1985) proposed that both types of leadership are necessary and that transformational leadership
actually enhances transactional behaviors. Since then, researchers have described the hybrid
nature of leadership in many of the nation’s great leaders. A transformation leader is likely the
kind of leader most people have in mind today when they think of an ideal leader.
Transformational leadership models generally include four factors that are concerned with
transforming behaviors, plus the two factors that involve transactional exchanges:
Transformational Factors:
1. Charisma or idealized influence.
Leaders are strong role model and make other want to follow their vision.
2. Inspirational Motivation.
Leaders communicate high expectations and use emotional appeals.
3. Intellectual Stimulation.
Leaders challenge followers to develop innovative ways of problem-solving.
4. Individualized Consideration
Leaders pay attention to individual needs and assign meaningful projects to help
followers grow personally.
Transactional Factors:
5. Contingent Reward.
Leaders negotiate with followers about what needs done and the reward for
meeting the goal (positive reinforcement).
6. Management-by-Exception
Leaders monitor followers and provide corrective criticism if standards are not
met (essentially negative reinforcement).
Transformational leadership links leaders and followers more than previous theories, and seeks
to raise the level of motivation and morality in both. The model also has the benefit of intuitive
appeal and extensive research. Studies, however, have been mainly with CEOs in large
companies; therefore, more research is needed with leaders at lower levels within organizations.
This relatively new leadership paradigm at best sees followers converted into leaders, and at
worst, could be abused by changing people’s values in a wrong direction. Overall, however,
transformational leadership provides a way to motivate followers toward achievement and self-
actualization instead of security, and provides opportunity for more comprehensive
organizational change. The Multifactor Leadership Questionnaire (MLQ) Form 6S (Bass & Avolio, 1992)
helps determine the leader’s strengths and weaknesses in transformational leadership.
For further study
Ivancevich, J. M. e. a. (1999). Organization and behavioral management (5th Ed.). New York:
Irwin McGraw-Hill.
Northouse, P. G. (2001). Leadership theory and practice (2nd Ed.). Thousand Oaks, CA: Sage
Publications.
Yanklovich, D., & Immerwahr, J. (1983). Putting the work ethic to work. New York: Public
Agenda Foundation.
