Apple Growth Partners

Leadership Styles: Transactional vs. Transformational

Healthy Growth Blog - Leadership Styles: Transactional vs. Transformational
By Erica Ishida | President and Chief Operating Officer

Each leader employs their own management style, ranging from hands-off, to facilitative, to micromanaging. These styles also include their own motivational strategies. While there are many management styles, most leaders find that they fall under one of two leadership categories, transactional or transformational.

Transactional Leadership

Transactional leaders stick to the rules and procedures and generally avoid trying new ideas or innovating. These types of leaders motivate by exchanging rewards or discipline for performance. They set criteria for their team to meet, and judge their performance based on those criteria.

This style of leadership is excellent for self-motivated teams, emergency situations, teams that need clear structure, have repetitive tasks, or are working under strict time constrains. These types of leaders are often found in manufacturing and sales, where emphasis is placed on meeting specific targets or quotas and there are strict, successful processes.

Transformational Leadership

Transformational leaders foster an independent workplace, embracing creativity, encouraging their team to innovate, take on responsibility, and make decisions. They are less focused on day-to-day activities and micromanaging, focusing instead on long-term success, developing strategy, and inspiring their team. These types of leaders encourage employee development, support their growth, and train them to become leaders. They have a mindset of communal success and work to improve team culture and communication.

This type of leadership allows each employee to have a greater stake in the organization, which often results in employees who stay longer-term and who help the organization grow and improve. Motivation for their team doesn’t come through monetary reward or punishments, but instead through employees seeing themselves as a part of something bigger.

Although transactional and transformational leadership are quite different approaches to leadership, comparing the two is not a question of good vs. bad or right vs. wrong. Both offer advantages in certain situations, and while you may naturally gravitate toward one style, understanding both and knowing when to utilize their strategies can make you an even stronger leader.


Subscribe to receive our blog and other interest based updates.