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. 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 focuses on a direct exchange process in which the transactional leader provides the rewards while 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.

To understand better the simplicity of transactional leadership, it is important to emphasize the fact that it is also known as the management style of leadership. Hence, this implies that a transactional approach is the most fundamental method of leading a team or 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. Within the context of Maslow’s Hierarchy of Needs, one of the major theories of motivation, this leadership style works at the basic levels of need satisfaction in which transactional leaders focus on the lower levels of the hierarchy.

The basic levels of need satisfaction found within the hierarchy include physiological needs such as food and shelter, as well as safety needs such as personal security, health and wellbeing, and financial security. Leaders or organizations following the transactional approach to leadership immediately address these basic needs, thus enabling 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 effective 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 elements of authoritarianism.
What this means is that it places all the pressure on the leader rather than the entire team, provides clarity within the 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

Depending on the situation, the strong focus on the basic needs of individuals is one of the weaknesses of transactional leadership. Note that the hierarchy of needs developed by Maslow illustrates the stages of growth in humans in consideration of their needs. Once individuals have reached the basic levels of needs such as physiological and safety needs, they naturally advance to more advanced levels such as belongingness, esteem, and self-actualization.

Some individuals are dissuaded by the bare minimum. For instance, there are employees who cannot be motivated by salaries and standard employment benefits alone. Some aspire to find deeper meanings in what they do while others want to have an integral part of the group or organizational success through deeper participation and collaboration.

2. Not Suitable for Certain Leadership Situations

Another weakness or advantage of transactional leadership is that it is inflexible. Because there are individuals who are deterred by the bare minimum, there are certain leadership situations in which transactional leaders can fail in 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. Furthermore, the straightforward exchange process utilized in this approach is not appropriate in organizations that require a complicated chain-of-command and more than one reporting line, in addition to collaboration and creative thinking requirements.

3. Promotes the Disadvantages of Authoritarian Leadership

Because transactional leadership shares some similarities with authoritarianism, it also shares the disadvantages inherently found in a leadership style that revolves around strict compliance and personal control over decisions. Some of these drawbacks include the inability to make the best decision because of lack of insights and inputs from different sources, the lack of feedback mechanism needed to make corrective changes, elimination of innovation, and too much dependence on the transactional leader.

Other drawbacks center on a decrease in the morale and motivation of followers. For example, some employees who are inherently creative thinkers and problem solvers might feel alienated because they think they are not contributing to organizational goals and objectives. The strict adherence to compliance or the imposition of stringent rules and processes can border to micromanaging, thereby discouraging individuals who want a higher degree of freedom in performing their tasks.