Transactional and Transformational Leadership and the Challenges in Temporary Organizations

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12th Jun 2020 Business Assignment Reference this

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The leadership theories have evolved over a period of time to define the key traits of a leader.  There has been a comprehensive study of leadership trends over the years.  There are many theories of leadership which would help us to identify the effective leaders for the leadership positions in the organizations.  These theories could help us build our leadership skills and become an effective leader.  The transactional and transformational leadership theory along with the challenges faced in the temporary organizations is elaborated.

Transactional and Transformational Leadership and the Challenges in Temporary Organizations

The evolution of leadership theories could be categorized in the chronological order.  There are primarily five leadership theories that have evolved over a period of time.

The Great Man theory evolved during the middle of the nineteenth century around 1940.  This theory assumes that great leaders are born and are not made.  The traits of leadership are intrinsic.  Great leaders are those who are destined to become a leader by birth.

The Trait theory assumes that people are either born or made with certain qualities that would make them a great leader.  It argues that some people are born to be leaders with certain traits like intelligence, creativity, sense of responsibility and other qualities that make them great leaders.  Trait Theory involves the traits or characteristics that an individual possess to become a leader.  The various types of traits examined by researchers included physical characteristics, personality characteristics, social characteristics and personal abilities and skills (House & Podaskoff, 1994).  Some of the traits which are commonly associated with great leadership include – people skills, perseverance, trustworthiness, self-confidence and creativity.

Behavioural theory attempts to explain distinctive styles used by effective leaders through the nature of their work.  Under the behavioural leadership theory, leaders can be made through study, practice and experience.  (Goff, D. G.).  It iterates that the leaders are made and not born.  The behavioural theory of leadership helps to understand the team members and their response during the times of conflict by managing the expectations and motivating the team members.

The Contingency Leadership theory argues that there is no single way of leading and that every leadership style should be based on certain situations.  People perform at the maximum level in certain places and minimal at certain places.  Contingency theory is an extension of Trait theory to an extent where the leaders express their leadership skills when they feel that their followers are responsive.

Transactional theory focuses on the process of interaction or transaction made between a leader and the followers than the character of the people.  Transactional leaders work through the given system and conform to organizational norms and values. The transactional theory emphasizes supervision, organizational structure and performance.

Transformational theory of leadership argues that when a person interacts with others and builds a solid relationship that results in a high percentage of trust, results in an increase of motivation, both intrinsic and extrinsic, in both leaders and followers.  The Leaders transform their followers through their inspirational nature and charismatic personalities.


Characteristics of Transactional Leadership

Transactional Leadership is also known as management leadership. It is a bureaucratic leadership style which lays emphasis on the transaction between leader and its subordinates, by employing rewards and punishments for motivating.  It has only one leader and is best suited for a settled environment.  It is reactive in nature and focuses on planning and execution by laying emphasis on the relationship with the members. This type of leadership works good for developing the existing structure in the organization.  The leader and the follower are in an exchange-based relationship and their objective is to meet other party’s needs.  It is effective as long as relationship is of mutual benefit.  There is an exchange of rewards for effort where the accomplishments are recognized and promises rewards for good performance.

Characteristics of Transformational Leadership

Transformational Leadership employs charisma and enthusiasm to inspire the subordinates and becomes a reason for the change or transformation in the subordinates. It is a charismatic leadership style wherein leader works with the subordinates to ascertain the desired change in the organization.  It can have more than one leader and suitable for a turbulent environment. It is proactive in nature and focuses on the innovation by laying emphasis on the beliefs, values and needs of the members.  This type of leadership works good for changing the existing structure in the organization.  There is a vision to build a new organization and the leader inspires his followers.  There is a cultivation of strong bonds between leader and subordinates over a period of time.  There is individualized consideration and the followers willingly subordinate themselves to the leader.

Challenges of Transactional and Transformational Leadership in Temporary Organizations

Temporary organizations are those organizations where the duration of the project is limited.  They have missing hierarchies which leads to higher uncertainty of the project execution and more risk towards the project completion.  There is a heterogeneous mixture of work teams.  Refer Table A1 for the characteristics of temporary organizations (Tyssen & Spieth, 2014).  The short-term orientation of the project and the focus on immediate deliverables shorten team members’ time-horizon (Marks, Mathieu , Zaccaro, 2001).  The Companies’ overall goals usually impede decisions and the focus on the actual tasks to be accomplished as time is too scarce to build relationships (Müller & Turner, 2007).  A great potential for conflict arises (Jones & Deckro, 1993).


Each leadership style has its own advantages and disadvantages.  There is no specific leadership style that is best suited for an organization in all circumstances.  Based on the existing structure, goals and needs of the organization, the required leadership style could be acquired.  Organizations’ structure, goals and sub-ordinates nature to be analysed to decide the leadership style that needs to be executed.  The characteristics of temporary organizations impact the effectiveness of leadership.  In case of temporary organizations, the environmental uncertainty should be scrutinized in terms of its effects on leadership in projects.


  • Goff, D. G. (2003). What do we know about good community college leaders: a study in leadership trait theory and behavioral leadership theory. Florida: ERIC, 22.
  • House, R. J. & Podsakoff, P. M. (1994). Leadership effectiveness: Past perspectives and future directions for research. In J. Greenberg (Ed.), Organizational behaviour, 45-82.
  • Jones, R.E., Deckro, R.F. (1993).The social psychology of project management               conflict. European Journal of Operational Research 64, 216–228.
  • Marks, M.A., Mathieu, J.E., Zaccaro, S.J. (2001). A temporally based framework and taxonomy of team processes. Academy of Management Review 26, 356–376.
  • Müller, R., Turner, J.R. (2007). Matching the project manager’s leadership styleto               project type. International Journal of Project Management 25, 21–32.
  • Tyssen, A. K., Wald, A., & Spieth, P. (2014). The challenge of transactional and transformational leadership in projects. International Journal of Project Management, 32, 365–375.

Appendix A

Table A1

Characteristics of Temporary Organizations (Tyssen & Spieth, 2014)

Temporary organizations’ characteristics Implication
Limited and predefined duration Short time horizon, hampers development of deeper social relations (e.g. trust)
Unique project outcome Limited use of experiences and routines; leader must encourage and allow a certain degree of autonomy
Missing hierarchies Authority gap
Higher uncertainty and risk involved Low commitment of project members
Heterogeneous work teams Role ambiguity of project members

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