What Is Transactional Leadership?
Imagine you’re a youth soccer coach. Every season, parents give you cash in exchange for your training. It’s a transaction that follows the logic of: “If you do this, I’ll give you that.” And as a leader, you use a similar approach to motivate the kids: “Score two goals, and we’ll go out for ice cream.” To keep everyone in line, you might even add a few punishments: “If you’re late to practice, you have to run extra laps.”
The above scenario describes the foundation for transactional leadership. Believing that internal motivation isn’t enough, transactional leaders use external incentives. They take control, tell their teams what to do, and follow a reward-penalty system to encourage optimal performance. If your team needs an extra push, it’s a practical approach. However, like all leadership styles, the framework can sometimes do more harm than good.
So, when should you use the transactional approach, and how can you be most effective with this style? In this lesson, we’ll answer those questions. First, you’ll learn what transactional leadership is, including its definition, primary characteristics, and benefits and drawbacks. Then, you’ll learn when this style is most useful and how to be an effective transactional leader.
Type
Lesson
Format
Self-Paced
Level
Intermediate
Prerequisites
None
Length
20 minutes
Series