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Advantages and disadvantages of transactional leadership

Advantages and disadvantages of transactional leadership

This article examines some of the advantages and disadvantages of transactional leadership style. Other issues examined here are the definitions, characteristics, and examples of transactional leadership.

Definition of transactional leadership

Transactional leaders cause followers to act in a certain way in return for something the latter want to have (or avoid).  According to St Thomas University (2018), these leaders value order and structure. They focus on results and measure employee success according to their organisations’ system of rewards and penalties. They expect more from their followers, however, they often fail to develop them (Matthews, 2018).

Characteristics of transactional leadership

Transactional leaders focus on tasks and short-term goals. They reward their followers in line with their performance. They value policies and procedures; however, may sometimes be inflexible which is not conducive to implementing a new programme of change.  They may also exercise legitimate and coercive power.

Advantages of transactional leadership

Transactional leaders are also often called managerial leaders who encourage their people through a system of reward and punishment. If followers do what they are expected of, they are certainly going to be rewarded. Conversely, if they fail to meet the expectations of the leader, a punishment will follow. The leaders clearly define rewards and penalties and therefore, there is no ambiguity concerning the expected behaviours of the followers which is very useful to get the job done.

Transactional leaders are very targeted on getting results and getting them rapidly. They strongly depend on a set of guidelines and principles which make it a straightforward leadership style to understand and follow.

Transactional leaders are extra concerned with maintaining the normal move of operations. They use disciplinary power and an array of incentives to inspire workers to perform at their greatest. With this style, they can achieve short-term organisational goals quickly. They can also reduce certain costs for their organisations.

Disadvantages of transactional leadership

According to Matthews (2018) transactional leaders care very little about the learning and growth of their followers. This creates long-term problems for their organisations, particularly, in succession planning. This can even create low morale within groups and restrict creativity.

Transactional leaders and the organisations that support them are not flexible which may frustrate workers who take pleasure in an environment that promotes individual thought and progressive ideas.

Transactional leaders do not consider the followers being self-motivated. They consider that they will solely be motivated via reward and punishment, and therefore, they have to be monitored to deliver satisfactory work.

Examples of transactional leadership

Many political figures around the world are transactional leaders. They may offer tax cuts in exchange for votes. Similarly, many sports coaches also apply this style of leadership. Players risk pain and injury to achieve the results that the coaches ask for. It should be noted that many high-level managers in the global business world like transactional leadership.

We hope the article ‘Advantages and disadvantages of transactional leadership’ has been helpful. You may also like reading Advantages and disadvantages of democratic leadership style.  Other relevant articles for you are:

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Last update: 17 September 2021


Matthews, D. (2018) Are you a transactional or transformational leader? Available at: (accessed 15 September 2021)

St Thomas University (2018) What is Transactional Leadership? How Structure Leads to Results, available at: (accessed 15 September 2021)

Author: Joe David

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.

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