Significant Behaviors of Transactional Leadership

Comparative study is an excellent method to understand greatness in certain things. Neurons have a pattern of learning objects by relating them. This is important for faster recollection which otherwise termed as quicker learning or better understanding. When someone says “Lightning”, you remember words like “Thunder” and “Rain” even without hinting. When I say “Transformational Leadership” you automatically think of “Transactional Leadership”. In this post, let us see significant behavior’s of Transactional Leadership for better understanding of “Transformational Leadership”.

As per Bass, “Transformational Leadership is in someways an expansion of Transactional Leadership”. With detailed Full Range of Leadership Model, he clearly explained how one can link Transactional and Transformational behaviors.

Transactional Leadership is based on exchange between leaders and followers. Leaders explain what needs to be done & what followers will get on achieving the goal. Significant Transactional Leadership Behaviors are:

1) Contingent Reward(CR)

2) Management-by-exception (either Actively or Passively) – MBE

3) “Hands-Off” or Laissez-Faire Leadership (LF)

Above behaviors are widely followed throughout the world as leadership styles also. These behaviors are having its own merits and it is not wrong in following them. Even a leader can be effective by using these transactional leadership behaviors appropriately at the right time.

Contingent Reward (CR)“If you finish up these goals with high-quality then you will get good bonus next year”. This is a usual statement you hear from any manager. Most of the time, this style is effective in motivating the team. But surely, it is always linked with benefit, hence it is transactional.

Management-by-Exception (MBE) – The name itself explains the way. Based on the output (exceptions) leaders take corrective actions. As this one is more related to issues rather than rewards, it is less effective than CR. There are two types of MBE.

MBE – Active(MBE-A) involves proactively identifying & tracking possible issues, mistakes and errors in the assigned activities. This style is required in some activities where safety is important.

MBE – Passive(MBE-P) involves taking corrective action until issues occur. When compared to MBE-Active, this one is less effective.

Laissez-Faire Leadership (LF) is doing nothing as a Leader – ignoring all its responsibilities. Letting others do the work & avoiding to show. Researchers termed this as “Non-transactional” and as the “Most Ineffective Leadership Style”. This behavior is shown when one holds the positional level leadership without the required skill or interest in the job.


1. Transformational Leadership (Second Edition) BY Bernard M. Bass, Ronald E. Riggio, Lawrence Erlbaum Associates, Inc.,2006

3 thoughts on “Significant Behaviors of Transactional Leadership

  1. Pingback: Situations to use Transactional Leadership in Team | Leadership & Project Management Champions

  2. Great writing

    In laissez fare style as you have termed it as “non transactional”, this also isn’t a transformational leadership style, isn’t it?

    if yes then certainly being non transactional doesn’t implies being a transformational leader?

    • You are right asad. Laissez-faire is non transactional & non-transformational. It is a separate one as per researchers. In fact Laissez-faire leadership is also termed a non-leadership style:-).

      As I followed Bass’s Full Range Leadership, it listed under transactional style. General researches segregates LF as different types.

      Laissez-faire -> Transactional -> Transformational

      Also, I presented it here in order to differentiate it from MBE-P. Thanks for your comments.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s