Transform or Transact
What is a leader supposed to do?

Transform or transact? What is the difference between transformational leadership and transactional leadership? And when are each most approrpriate?

Transactional leadership is based on transactions - or exchanges - between the leader and the follower. It assumes that the working relationship is one where the leader issues the work, praises or criticises, rewards or punishes.

The follower has little responsibility, other than doing as they are required, correctly. All works well if both leader and follower carry out their part in the transactions as expected.

This approach is more often seen in low skilled jobs, where procedures are clearly defined or where there is little change.

Transformational leadership theory is all about change. Transformational leaders inspire others to follow a vision. They create opportunities for people to show flair and to take responsibility for new ideas.

They are often very extravert, charismatic and strategic. They see the big picture rather than the detail. They inspire great loyalty, providing they succeed. If they fail, or are seen to be hypocritical, the followers may well become disillusioned or cynical.

Transformational leadership is more appropriate in fast changing situations, where people have high levels of skill and where the leader can afford to get involved in the detail.

So, transform or transact? Look at your situation, look at what is expected from others, think about te type of leader you wish to be. It may be that you start as one (probably transact) and work towards being the other (probably transform).


Bass, B.M. (1990), "From transactional to transformational leadership: Learning to share the vision". Organizational Dynamics, Winter 1990, pp19-31.

Return from Transform or Transact to Learn-to-be-a-Leader home page.

Custom Search