Transformational And Transactional Leaders

TRANSFORMATIONAL AND TRANSACTIONAL LEADERS 1

Transformational and Transactional Leaders

Student’s Name

Institution

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Different managers utilize management styles that are distinctly different. These may

include styles that are autocratic, relatively hands-off, micromanaging and even facilitative styles

(Schieltz, 2016). Also, the leaders in an organization can employ various strategies to boost the

performance of employees, for change to be realized and also for motivating the employees.

Transformational and transactional leadership styles are among the most common but the two are

totally different when it comes to motivation and management. Transactional leadership is

mostly concerned with the maintenance of the normal operations flow in an organization

(1Changing Minds, 2016). In contrast, transformational leaders not only oversee the daily

operations in an organization but also formulate strategies that will ensure the company is

propelled to the highest success and performance levels (2Changing Minds, 2016). The

differences between these types of leaders can best be understood using two examples of leaders.

Therefore, this essay will serve as an analysis of Bill gates as a transactional leader and Richard

Branson as a transformational leader.

Richard Branson, Virgin Atlantics group of companies CEO is one leader who typifies

the modern day's transformational leaders. Richard Branson is a master motivator as a leader of

the Virgin Group of companies (Dearlove, 2007 p.74). Branson is reported to promote the

talented employees in his company into managerial positions as opposed to advertising for

vacancies in managerial positions in his companies as most organizations. As a result, most of

the staff in Richard Branson’s companies put on more effort at work while holding the belief that

they will get noticed and promoted into managerial positions (Dearlove, 2007 p.74). This is

typical of transformational leaders who serve to inspire motivation, confidence and a purpose

sense in the employees (Schieltz, 2016). Transformational leaders always look for ways from

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within to motivate the employees and use this effectively to drive the company to the direction

the leader wants.

Ideally, Richard Branson just like typical transformational leaders always tries the

impossible and employ various strategies to ensure success in their companies. It is reported that

at one time, he called Virgin Atlantic’s marketing director and told him to put an advert on the

Evening Standard of London (Dearlove, 2007 p.75). Despite being late, the CEO urged the

marketing director ensure that the ad appeared in the newspaper. The employee had to do all it

takes to ensure the advert appeared the following day in the newspapers. Most transformational

leaders are always ready to take risks that are well calculated (Carless et. al., 2000). In most

cases, these risks lead to positive outcomes. The advert placed ensured that Virgin Atlantic

realized an increase in its customers in that week than the previous weeks. In addition, Branson

expects and wants the individuals around him to ensure they work at their best for the set goals

he has for the company to be achieved. The CEO encourages the employees to always try to do

the impossible. This has ensured the company experiences success as most employees perform at

their best.

Richard Branson, therefore, encourages open communication and cooperation between

the employees and managers. The CEO ensures that supervisors in the lower levels and the top

managers understand what inspiring others and commanding respect entail (Dearlove, 2007 p.75-

76). Just like most transformational leaders, Richard Branson has created an environment that is

open in that employee from varied positions can interact freely and this creates a good

relationship between employees which is essential for teamwork. The leader ends up being loved

and is the symbol of inspiration within the company (Carless et. al., 2000). Each employee in

Branson’s company know what the leader expects from them and thus work their best to ensure

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this is achieved. Therefore, Richard Branson acts as the symbol of motivation for the employees

in the organization.

The transformation leadership style is most effective in organizations that organizational

change and development is required. This type of leadership is reported to reach each of the

levels in an organization (Schieltz, 2016). Therefore, using this style, one can motivate stimulate

and even inspire employees from all levels in a company. In addition, a company that requires

downsizing, reorganization and strategic redirections are ideal for this style. Also, this leadership

style can be applied in almost all if not all organizational settings (Schieltz, 2016). Organizations

dealing in transport, education, industries can all be managed by style due to its flexibility. This

style of leadership is also effective in organizations in which individual employees need to be

grown and developed. This is because transformational leadership has an impact on the self-

growth of individuals. It is a style that makes employees transcend beyond their self-interests and

self-conceptualization (Schieltz, 2016). Moreover, the leadership style is effective in

organizations which need an improvement in its performance. The leadership style helps

employees perform beyond the expectations of other people and even themselves.

Richard Branson’s transformational style of leadership is effective as it has led into great

turnarounds in terms of fortune in the various companies under the Virgin Group of Companies.

His style of leadership inspires and motivates the employees to work hard and this ensures the

companies productivity improves (Schieltz, 2016). This is because the employees end up

creating a good customer experience for the company’s customers and this results in increased

productivity. Transformational style of leadership was appropriate for the Virgin group of

companies. It is reported that this leadership style can be applied widely unlike styles like

Transactional leadership style. Virgin Group consists of over 200 companies and these

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companies have employed over 50, 000 employees (Dearlove, 2007). The companies are

reported to be in various industries and since transformational leadership can be widely applied,

it was ideal for this Richard Branson to employ it at Virgin. Moreover, before the adoption of

this style, 14 of Richard Branson’s company under Virgin reportedly failed. Therefore, this

shows that the companies need a leadership style that will lead to organizational change and

strategic redirections to ensure its success.

Bill Gates, on the other hand, is perceived as the leader who effectively typifies the

transactional style of leadership. The leader is the owner of Microsoft Corporation which is the

world’s leading company for personal computers softwares (Mirror, 2015). Transactional leaders

are always directive, motivates employees externally, resistant to change, passive and is in most

cases concerned with self-interests (1ChangingMinds, 2016). Bill Gates always wants to have the

control of both company and the industry Microsoft operates in. The CEO has successfully made

Microsoft a monopoly that is stable. This Gates has achieved by creating barriers for the new

entrants in the same industry that Microsoft operates. To have such abilities, a leader should have

the toughness and rigid control. Also, most transactional leaders focus on individual performance

and their impact on the company. This is because such leaders focus more on the performance of

the company (1ChangingMinds, 2016). When Bill Gates realized that Microsoft’s co-founder

Paul Allen’s contribution had less impact on the company, he decided to sidelined Allen from

Microsoft.

Also, Bill Gates does not encourage independent thinking from his employees. Most

transactional leaders discourage employees from thinking and making decisions by themselves

thereby limiting their creativity (1ChangingMinds, 2016). The CEO believes that each employee

should work as per the directions outlined. Moreover, Gates does not seek counsel on decision-

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making matters relating to the company, not even from the board members (Mirror, 2015).

However, Gates is reported to reward employees with managerial positions when they are

reported to perform better. Most transactional leaders only reward individual brilliance and not

teamwork. Therefore, this leadership style discourages collaboration or teamwork

(1ChangingMinds, 2016). This encourages each employee to work hard lest they are identified as

not putting much effort.

Transactional leaders like Bill Gates serve to motivate the employees in the company

using external means. Bill Gates is reported to be very strict and even sidelined Allen,

Microsoft’s co-founder when he discovered that his illness made him perform as per the

expectations (Mirror, 2015). Therefore, the CEO acts as motivation for the employees to work

hard so as to avoid disciplinary action when signs of poor performance are detected. Also,

transactional leaders provide the employees with the routine or structure (Travis, 2017). The

employees are clearly shown what needs to be done and know who is in charge. Any deviations

from what is expected results in punishment. As a result, such organizations end up improving

their performance. Moreover, this leadership style assures the organization of improvement

regarding performance due to its ability to identify employees who perform poorly (Travis,

2017). Managers can determine when employees are meeting set standards. Bill Gates was able

to identify that Allen’s illness was affecting his performance.

The use of transactional leadership in an organization is needed when the leader realizes

that the employees or team members perform better when the leader rewards them when they

perform well (Akers, 2016: Travis, 2017). The positive or negative reinforcement associated

with an employee’s performance is the main characteristic of transactional leaders. As a result,

the company’s performance escalates due to this external motivation (Akers, 2016). Moreover, it

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is applied in conditions where the employees have to be constantly and strictly supervised for

them to perform better. This type of leadership is able to identify easily employees who perform

poorly.

The style of leadership has been effective making Microsoft Corporation one of the most

successful companies not only in the United States but the whole world. Bill Gates always

wanted to ensure Microsoft was the topmost organization in the world regarding personal

computers softwares (Mirror, 2015). The CEO knew that by creating a monopoly without

working hard this would not be possible. This is the reason Gates adopted the motivation of

employees through rewards which are typical of transactional leaders. Moreover, to ensure this,

the employee's performance was to be constantly monitored and analyzed (Mirror, 2015). To

Gates, the only leadership style that would achieve this would be to use transactional leadership.

In short, therefore, for the success of any organization, it is necessary to adopt an ideal

leadership style. Transformational leaders encourage motivation of employees and also come up

with strategies to bring a change within an organization. Transactional leaders, in contrast, are

controlling, directive and very strict and carry out the motivation of employees externally.

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References

1Changing Minds. (2016). Transactional leadership Retrieved from

http://changingminds.org/disciplines/leadership/styles/transactional_lea

dership.htm

2Changing Minds.(2016) Transformational Leadership Retrieved from

http://changingminds.org/disciplines/leadership/styles/transformational_

leadership.htm

Akers, H. (2016). A Look at the Benefits of Transactional Leadership Style. Retrieved from

http://yourbusiness.azcentral.com/look-benefits-transactional-leadership-style-

21658.html

Carless, S. A., Wearing, A. J., & Mann, L. (2000). A short measure of

transformational leadership.Journal of Business and Psychology, 14, 389–405.

Dearlove, D. (2007). Business the Richard Branson Way: 10 Secrets of the World's Greatest

Brand Builder. Capstone.

Mirror. (2015). Bill Gate’s Transactional Leadership Style - Daily Mirror - Sri Lanka Latest

Breaking News and Headlines. Retrieved from http://www.dailymirror.lk/75949/bill-

gate-s-transactional-leadership-style

Schieltz, M. (2016). Why Transformational Leadership Is Important | Chron.com. Retrieved

from http://smallbusiness.chron.com/transformational-leadership-important-10423.html

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Travis, E. (2017). A Look at the Benefits of Transactional Leadership Style | Chron.com.

Retrieved from http://smallbusiness.chron.com/look-benefits-transactional-leadership-

style-15346.html

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