Transactional Leadership: Advantages and Disadvantages

Transactional Leadership: Advantages and Disadvantages

Transactional leadership is both a theory and a style of leadership that focuses on the supervision and organization of individuals and tasks, as well as the use of a performance assessment through rewards and punishment. Furthermore, unlike transformational leadership, which focuses on creating a vision and spearheading change, this approach involves maintaining the status quo and providing rewards in exchange for task performance.

Pros: The Strengths and Advantages of Transactional Leadership

1. Provides A Simple Approach to Leadership

Simplicity is a critical advantage of transactional leadership over other theories and models of leadership. The model is considerably straightforward because it involves a direct exchange process in which the transactional leader provides the rewards and the followers perform the expected tasks in exchange. This advantage translates to a more specific advantage: Transactional leaders are effective in getting standardized tasks completed.

In addition, to understand better the simplicity of transactional leadership, and why this is an advantage over other leadership styles, it is important to underscore the fact that it is also known as the management style of leadership. This implies that a transactional approach to leadership is the most fundamental method of leading a team or managing an entire organization because of its emphasis on supervision, organization, and performance.

2. A Focus on the Basic Needs of Individuals

Another strength of transactional leadership is its emphasis on motivation through the satisfaction of basic human needs. Hence, within the context of the established Hierarchy of Needs of Abraham Maslow that has become one of the main theories of motivation, this leadership style works at the basic levels of need satisfaction. Transactional leaders are focused on providing the lower levels of the entire hierarchy of needs.

The basic levels of need satisfaction found within the hierarchy include physiological needs like food and shelter, and safety needs that include personal security, physical health and well-being, financial security, and emotional wellbeing. Leaders or organizations following the transactional approach to leadership address these basic needs. This enables them to implement a standardized model for motivating people and managing their performances.

3. Suitable for Specific Leadership Situations

Certain leadership situations can take advantage of the strengths of transactional leadership. It is more effective and even essential in increasing the efficiency of established procedures or routines, handling new organizations characterized by chaos and the absence of rules, and establishing and standardizing practices, processes, and behaviors. For existing organizations, the focus of the transactional style of leadership is to keep things the same.

Some aspects of transactional leadership exhibit some of the elements of authoritarian leadership and micromanagement. This is not always bad. These approaches place all the pressure on the leader rather than the entire team. This helps to provide a clearer chain of command, reduces the time needed to make decisions, creates a consistent result, promotes efficiency in accomplishing standardized tasks, and streamlines communication.

Cons: The Weaknesses and Disadvantages of Transactional Leadership

1. Deter Certain Individuals Due to Focus on the Basics

The strong focus on the basic needs of individuals is one of the weaknesses of transactional leadership. This is still dependent on the situation. The Hierarchy of Needs illustrates the stages of growth in humans in consideration of their needs. Individuals naturally advance to more advanced levels such as belongingness, esteem, and self-actualization once they have reached the basic levels of needs such as physiological and safety needs.

It is also worth considering that some individuals are dissuaded by the bare minimum. There are employees who cannot be motivated by salaries and standard employment benefits alone. Some aspire to find deeper meanings in what they do and others want to have an integral part of the group or organizational success through deeper participation, collaboration with their peers and leaders, greater involvement, and personal ownership of tasks.

2. Not Suitable for Certain Leadership Situations

Another weakness or disadvantage of transactional leadership is that it is inflexible. To illustrate, because there are individuals who are deterred by the bare minimum, and since others aspire meaningful in what they do, there are certain leadership situations in which transactional leaders fail at motivating these people. Examples of these leadership situations include competitive team sports and occupations that require creativity and solving problems.

The autocratic nature of the transactional approach to leadership is not also suitable for situations that require strong collaborations among individuals or within a particular team. Furthermore, because of the straightforward exchange process utilized in this approach, it is not effective in teams or organizations that require a complicated chain of command and more than one reporting line, and collaboration and creative thinking requirements.

3. Promotes the Disadvantages of Authoritarian Leadership

Transactional leadership has the same disadvantages that are inherent in leadership styles that involve strict compliance and personal control over decisions. Some of these drawbacks include the inability to make the best decision because of a lack of insights and inputs from different sources, the lack of feedback mechanism needed to make corrective changes, the elimination of innovation, and too much dependence on the transactional leader.

Other drawbacks center on a decrease in the morale and motivation of followers. Individuals who are inherently creative thinkers and problem solvers might feel alienated because they do not feel that they are contributing to organizational goals and objectives. The strict adherence to stringent rules and processes can border on micromanaging and discourage individuals who want a higher degree of freedom or autonomy in performing their tasks.