A transformational leader engages with the followers for creation of an environment that enables “performance beyond expectations”, and “raises one another to higher level of motivation and morality”. In this respect, a transformational leader serves as a role model for the followers to encourage them to challenge their own values, and contribute to the changed effort through creation of the new vision and organizational culture’s changes.
A transactional leader “takes initiative in making contact with others” in pursuit of “a joint purpose” when workers are rewarded for meeting specific goals. In this respect, a transactional leader uses contingent reinforcement as an encouragement of close connection between goals and rewards, in order to stimulate the followers for better performance.
It should be pointed out that, the transformational leadership style entails higher commitment of the mission-focused followers when they are moved to act for the challenge, and develop intrinsic motivation through greater learning opportunities, developmental assignments, coaching and recognition. On the other hand, the transactional leadership style presupposes that career-focused followers may develop extrinsic motivation, when the leader’s behavior can transform their unwillingness into passive compliance or active personal commitment. Therefore, the transactional leader uses complexity-coping techniques that imply planning and budgeting of the set targets, creation of the organizational structures, stuffed with qualified individuals, whose delegated performance is monitored by devised systems; and controlling of the results with identification of deviations of the set plan. The transformational leader’s change-coping techniques, in turn, are focused on the development of the vision and strategies that help to accomplish it, creation of coalition with the followers, who are committed to the goal’s achievement, and stimulation of the followers for the right direction thorough challenging of their values.
In addition, transformational leadership techniques reflect employees’ reaction to changes, and enhance their ability to accept them. Additionally, transactional leadership techniques help convert new ideas into marketable products through structuring, controlling and rewarding of the followers’ efforts.