Transformational and Transactional Leadership

Transformational leadership is about implementing new ideas. These leaders continually change stay flexible and adaptable, and continually improve those around them. According to Tracey and Hinkin (1998), transformational leadership is a process that motivates people by appealing to higher ideals and moral values, defining and articulating a vision of the future, and forming a base of credibility. Tracey and Hinkin (1998) observed that characteristics of transformational leadership follow clear themes.

Transformational leaders emphasize new possibilities have an exciting vision of the future. Organizations that are trying to change who are led by transforming leaders appeal to human characteristics. Transformational leaders manifest passionate inspiration (Hersey & Blanchard, 1996) and visibly model appropriate behaviors (Kouzes & Posner, 1987). The goal is change that raises the organizations to new heights. To reach the goal, organizations must receive new energy and vision from their leaders.

Transformational leaders emphasize the need for understanding change as a process.

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A process mindset is the basis for effective transformation (Heckscher, Eisenstat, & Rice, 1994). The process mentality involves defining clear concepts (Keller, 1995). It also requires a future orientation toward problem solving (Smith, 1990). One of the key factors in the change process is for each person to become and remain a continual learner (Mink, 1992). These types of leaders influence unique human qualities. According to Covey (1991) transformational leaders are preoccupied with purposes, values, morals, and ethics. They align internal structures to reinforce values and goals. They seek to release human potential and lead into new directions. Transformational leaders have an impact on the psychology and behavior of followers in order to shape their values (Brown, 1994).

The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders. Punishments are not...