Transactional/Transformational Leadership - Essay Example

Hence it is best to say that level 5 leaders are the motivating forces behind the success of an organization but are modest enough to let other leaders in the company take the limelight for achievements. Transactional leaders are usually characterized by being good at bargaining where a certain situation or result has its respective consequence. These types of leaders or supervisors believe in establishing an employer-worker relationship that is based on reciprocity wherein every task in the company is clearly defined and each achievement or failure gets either a reward (increase in wage or bonus) or a punishment (fine) (Cherry, 2007a).

In contrast to transactional leaders, transformational leaders are those who also believe in getting things done within the corporation in terms of goal accomplishments. However, the main difference between a transactional leader and a transformational leader is that the latter motivates employees to work hard and do their part in improving the organization/company not because of the incentives they will be getting if their efforts paid off; but because if everybody works hard in undertaking company goals then the company is sustainable for a longer period of time.

This vision in the long run will not only benefit a few but will benefit everybody working within the organization (Cherry, 2007b). In relation to the given scenario and the abovementioned description of leaders it can be said that Executive A is a level 5 leader, Leader B is a transactional leader and Leader C is transformational leader. In the specified situation Executive A was characterized as ambitious and focused on the success of the company but has maintained a low profile, letting his subordinates take the praises for the company’s success and accepts the responsibility for any failures.

Prior to his being the CEO, the company was losing millions of dollars annually and has a low stock rating. But when he assumed the CEO position with the company, he was able to turn its finances around as proven when the stock rating for the company gained an increase of 128% and when profit was made during his second quarter in office. Leader B is considered as a transactional leader type even though he has the ideas of Executive A with the same long-term vision for the company. This is because he believes that employees are individually responsible for the outcome of the tasks assigned to them where they are given rewards for properly completing a task or a punishment if things go wrong.

Although he believes in the clear cut role of everybody in the chain of command in the organization, Leader B fails to realize that the leader is the one accountable for the faults of his/her subordinates. Leader C has the same ideals with Executive A and Leader B when it comes to the realization of the company’s goals but his managerial style differs from Leader B since he views the lower ranking employees not just as workers but individuals who contribute greatly to the improvement of the organization.

And unlike Leader B who expects that employees work hard in order to individually get a reward, Leader C motivates his subordinates to look beyond their self-interests and work as a team, because he wants employees to realize that leaders are not present to critic their work but to help them in the right direction so goals can be realized efficiently.