Transactional Leadership Examples

Transactional leadership is a method of leading people through the distribution of rewards and consequences. This is intended to promote compliance and is not usually intended to promote change within the team. Its intention is instead to simply maintain the status quo. You’ll often find this leadership style employed on athletic teams and it is a method that parents often use when managing the home environment.

When parents reward a child for complying with the rules or send them to a timeout for not following the rules, it is a classic example of the transactional leadership style. What matters is that the job gets done. Creativity is allowed as long as it stays within the confines of the rules and procedures that have been dictated.

When Is Transactional Leadership Most Effective?

The most effective use of transactional leadership is during an emergency situation. When people are in a mode of crisis, and then tend to be a bit anxious, even if they’re responding to the emergency instead of being involved within it. This leadership style helps people focus on what they need to do because the rewards they get become a light at the end of the tunnel. The consequences of not acting in a timely fashion continue the motivation to succeed.

Projects that must have specificity to them would also benefit from this model of leadership. This is because there must be direct compliance in regards to the work that is completed. Rewarding compliance and disciplining non-compliance allows for this to happen most effectively. It’s also why athletic coaching tends to follow this type of leadership. By complying with a coach order, wins can then come about.

What Are the Benefits of Transactional Leadership?

Transactional leaders are good at increasing the efficiencies of any team in any environment. They focus on the procedures of any given task and want the rules followed without making changes to the organization. It is the complete opposite of the unstructured nature of business that tends to occur from a creative or entrepreneurial vantage point.

These leaders also set goals that are based on the organizational mission that has been set forth. They communicate clearly that compliance will result in rewards and then the procedures to obtain these rewards is clearly outlined. Feedback is designed to show those on the team where they are falling behind in terms of procedural compliance so that they can keep up with the rest of the team.

The advantage of this leadership is that it stays directly in the present. Transactional leaders are not concerned with what has happened in the past. They aren’t searching for ideas that are forward in thinking for future success. They want to see compliance and a job well done on this day and this day only. That’s why it is best for an existing team that needs to increase production through efficiency and for those situations when only one method can be used to complete a job.

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