Raising Standards Together

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MEP learning pack

Masters in Education Practice: Leadership


Thinking about leadership and leadership styles


Transactional leadership – leadership through exchange

Transactional leadership is often contrasted with transformational leadership which was explored in the previous subtopic. The transactional style of leadership was first described by Max Weber in 1947 and later by Bass (1981) and involves motivating and directing followers primarily through appealing to their own self-interest. Typically the exchange between leader and follower takes place to achieve routine performance goals.

Leaders exercise power and influence through controlling the rewards in an organisation, rewards they can offer or withhold from the workforce. So in contrast to transformational leadership, the transactional approach tends to be pragmatic, transitory and not contingent on deeply shared values. Effective transactional leadership depends on leaders regularly fulfilling the expectations of followers. The strength of transactional leaders comes from their formal authority, power and responsibility in the organisation. The transactional headteacher holds power in the form of key rewards such as promotions and references, but ‘requires the cooperation of staff to secure the effective management of the school’ (Bush and Middlewood, 2013; p.19).  

So, transactional leadership focuses on the pragmatism of everyday management rather than longer term vision. It is designed to deal with stable structures and because of this came to be viewed as insufficient for coping in contexts of flux and change. This is seen as the main criticism of this form of leadership.

Key dimensions of transactional leadership

Transactional leadership has been portrayed as having three dimensions.

  • Contingent reward: the degree to which the leader sets up constructive engagement with followers; leaders consult with followers about what is to be done in exchange for implicit or explicit rewards and the desired allocation of resources.
  • Management by exception – active: active leaders monitor follower behaviour/performance, anticipate problems, and take corrective actions to address followers’ mistakes.
  • Management by exception – passive: passive leaders wait until behaviour has caused problems before taking action, with usually negative feedback or reprimands.

These descriptions raise some fundamental issues regarding the ethics of this kind of leadership. Where it works well, transactional leadership is respectful of the mutual gains to be had in the exchange between leader and follower.

Transactional leadership is moral when the truth is told, promises are kept, negotiations are fair and choices are free . . .It is immoral when information harmful to followers is deliberately concealed from them, when bribes are proffered, when nepotism is practiced, and when authority is abused.

(Bass and Steidlmier, 1999; p.192).

At its best it provides an efficient way of marshalling the joint efforts of leaders and followers in the running of the organisation, but it is unlikely to set down deep cultural and collaborative roots.

Activity 2.4.1

Read the following extracts; then summarise what you feel are the benefits and the inherent dangers of transactional leadership.

In a school setting what could be done to ensure transactional approaches work well and do not descend into a culture of rule following and the development of a ‘low performing system’?


Transactional leadership represents those exchanges in which both the superior and the subordinate influence one another reciprocally so that each derives something of value . . .  Simply stated, transactional leaders give followers something they want in exchange for something the leaders want. Transactional leaders engage their followers in a relationship of mutual dependence in which the contributions of both sides are acknowledged and rewarded . . . In these situations, leaders are influential because doing what the leaders want is in the best interest of the followers. Effective transactional leaders must regularly fulfil the expectations of their followers. Thus effective transactional leadership is contingent on the leaders' abilities to meet and respond to the reactions and changing expectations of their followers.

(Kuhnert and Lewis, 1987; p.649)

The moral legitimacy of transactional leadership is demanding in many ways. It depends on granting the same liberty and opportunity to others that one claims for oneself, on telling the truth, keeping promises, distributing to each what is due, and employing valid incentives or sanctions. It recognizes pluralism of values and diversity of motivations.

(Bass and Steidlmier, 1999; p.185)

This is what those advocating hierarchical, control-orientated, transactional forms of leadership for schools seem not to understand. There can never be enough rules to ensure that those we do not trust do the right thing. And as rules are added to prevent more and more anticipated future diversions from the right thing, we inadvertently contain people from using their problem solving capacities on behalf of the organisation's purposes. Our schools become (or remain) . . .  organizations 'with brains' all of which reside at the top of the organization attempting the futile task of thinking for everyone else, and thereby ensuring a low performing system.

(Leithwood, 2000; pxv)

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