3 Reasons Why Leadership is Importance in Workplace
Agus Setiawan

PhD candidate and result-oriented Director with 25 years experience with involvement in all levels of Business Strategy, Sales and Marketing, Managing Project and Product Development. Aside of managing a company, he is also the best corporate trainer and public speaker in seminar and conference.

8 Key Differences Between Transactional and Transformational Leadership


What is Transactional Leadership?

Transactional Leadership is a leadership style based on the setting of clear goals and objectives for followers and the use of rewards and punishments to encourage compliance. It focuses on improving the current situation of the organization by framing the steps and controlling the organizational activities. The basic purpose of this type of leadership is to revamp the existing corporate culture and to enhance current policies & procedures.

Get to Know the Transformational Leadership

Transformational leadership is a leadership style that can inspire positive changes in those who follow. Here, the leader seeks the requirement for a change in the existing organization culture, gives a vision to his subordinates, incorporates mission and implement the change with the dedication of his followers. In addition, transformational leaders are generally energetic, enthusiastic, and passionate.

Key Differences Between Transactional and Transformational Leadership

Transactional Leadership is a type of leadership whereby rewards and punishment are used as a basis for initiating the followers. On the other hand, transformational leadership is a leadership style in which the leader uses his charisma and enthusiasm to influence his followers. In transactional leadership, leader lays stress on his relationship with followers. Conversely, in transformational leadership leader lays stress on the values, beliefs and needs of his followers.

Furthermore, transactional leadership is reactive and is best for a settled environment whereas transformational leadership is proactive and is good for the turbulent environment. Transactional leadership works for improving the present conditions of the organization. On the other hand, Transformational Leadership works for changing the present conditions of the organisation.

Moreover, transactional leadership is bureaucratic where there is only one leader in a group and focused towards planning and execution while transformational leadership is charismatic in which there can be more than one leader in a group and it promoted innovation.


In conclusion, both leadership style either transactional or transformational are needed. The transactional leaders ensure that routine work is done reliably, while the transformational leaders look after initiatives that add value. Both of them have several differences but at the end the main goal is to make the organization move forward and be successful.

Cherry, K. (2020). Transformational Leadership. Verywell Mind blog.
Editorial Team (Accessed on December 17, 2020). Difference Between Transactional and Transformational Leadership. iEduNote blog.
Surbhi, S. (2019). Difference Between Transactional and Transformational Leadership. Key Differences blog.

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