Transformational, Transactional, and Servant Leadership Styles

Introduction to Leadership Styles

Before defining leadership behaviors, empirical studies focused on the characteristics of efficient leadership, leadership practices, and the skills and traits of a leader. Later, these studies shifted toward the relationship between leaders and followers and the factors that generate positive effects on that relationship.

Transformational and transactional leadership were first introduced by Burns (1978) and later developed by Bass (1985). Both types attend to the relationship between leaders and followers. Transactional leadership views the leader-follower relationship as the result of an exchange: leaders give followers something they want in return for something the leader wants. The relationship between the two parties is therefore one of mutual interdependence. Transformational leadership, by contrast, emphasizes the role of the leader's personal values and beliefs as a source of stimulation for followers. Empirical research has reported that organizations adopting transformational leadership are highly effective (Bass and Avolio, 1990).

Servant leadership was introduced by Greenleaf (1977) and positions the leader as a servant. The leader seeks out others' needs and strives to fulfill them before aspiring to lead. This style has received a great deal of attention in recent years because it describes a relationship desired by both parties. However, servant leadership lacks the depth of empirical studies needed to support it fully (Greenleaf, 1970).

Each of the three leadership styles has its own characteristics and impacts the leader-follower relationship — and the organization — in its own particular way.

Transformational Leadership

This type of leadership applies to situations in which the leader-follower relationship is such that the leader encourages the development and growth of the follower. Followers are influenced by leaders to aspire toward a higher collective purpose (Bass, 1985). As a consequence, followers develop into leaders and leaders become moral agents (Burns, 1978). The leader-follower dynamic thus transforms both parties. The leader may in turn pursue even higher goals, such as integrity, human justice, or dignity. Hitler is frequently cited as an example of pseudo-transformational leadership, whereas Gandhi stands as an example of an authentic transformational leader.

Avolio, Waldman, and Yammarino (1991) identified four types of actions undertaken by transformational leaders to stimulate followers:

Charismatic influence helps the leader engage followers in the organization's mission and vision; in return, followers respect and trust the leader.

Inspirational motivation stimulates the follower's sense of pride, which positively affects their connection with organizational goals; in return, followers exhibit optimism and enthusiasm.

Intellectual stimulation motivates followers' creativity and imagination to find new solutions to old problems.

Individual consideration helps leaders focus on each follower's individual characteristics in order to better meet their development and growth needs.

Studies have shown that in organizations adopting transformational leadership, the motivation of both followers and leaders reaches high levels (Burns, 1978). Moreover, followers who identified their leader's style as transformational also rated their organization as highly effective (Bass and Avolio, 1994).

Transactional Leadership

According to Bass (1985), the behaviors associated with transactional leadership include contingent reward, management by exception, and laissez-faire. Laissez-faire is not a prominent topic in transactional leadership research because the leader is effectively absent from the relationship, leaving the follower in the position of stepping up and making decisions independently. The actions that transactional leaders undertake cover a wide range, from low-quality exchanges of goods to high-quality transactions (Landy, 1985).

Transactional leaders typically collaborate with followers to identify their roles and responsibilities, which moves them closer to reaching organizational goals. This collaboration boosts followers' confidence. Despite stimulating followers' motivation, however, the collaboration alone is not sufficient to sustain the level of performance that satisfies leaders' needs (Bugenhagen, 2006).

According to Bass and Avolio (1990), transactional leadership is characterized by three factors:

Contingent reward refers to the practice of identifying tasks and the rewards offered in exchange for completing them.

Management by exception (active) refers to the situation in which followers' work is monitored and intervention occurs only when requirements are not met.

Management by exception (passive) refers to the situation in which followers report regularly on their work and feedback from managers is provided in both cases — whether requirements are or are not met.

The leader-follower relationship holds as long as the reward system functions. The leader's engagement with followers can vary from engaged to disengaged depending on the circumstances characterizing the organization (Bass, 1985; Bass and Avolio, 1990).

Servant Leadership

Servant leaders are those who serve their followers before leading and who consistently prioritize others' needs above their own. Servant leaders help followers achieve the best outcome their skills allow (McMinn, 1989).

The decision-making process is a thorough one, and the leader involves all followers in it through empowerment (Stone, Russell, and Patterson, 2004). Moreover, this process is subject to ongoing revision, as the leader continually reviews direction, purpose, and vision (Greenleaf, 1998).

According to Spears (1995, 2002), the characteristics of a servant leader can be summarized as follows:

Good listener — the servant leader silences the inner voice and listens to others, also using the listening opportunity to reflect on the topics raised.

Empathic — the servant leader tries to relate to the speaker's situation in order to achieve a better understanding of it.

Healing — the servant leader learns to heal themselves and others during a transformation or transition process.

Awareness — the servant leader is aware both of themselves and of the broader context, assisting others in better understanding issues by drawing on ethics.

Persuasive — the servant leader relies more on persuasion than on positional authority in the decision-making process.

Conceptualization — the servant leader approaches issues over a longer time horizon than day-to-day concerns, seeking a deeper comprehension of key concepts.

Foresight — drawing on intuition and past experience, the servant leader is capable of foreseeing the consequences of decisions, better understanding the present situation, and turning past mistakes into constructive learning.

Stewardship — the servant leader is committed to serving others and considers themselves a steward of other people's development and empowerment (Sendjaya and Sarros, 2002).

Committed to people's growth — the servant leader is committed to both the professional and personal growth of all people within the organization.

Community builder — the servant leader is continually searching for ways to build communities within the organization.

Later, "calling" was identified as an eleventh characteristic of servant leaders (Barbuto and Wheeler, 2002). This characteristic aligns with Greenleaf's (1970) pioneer writings on the subject.

Conclusion

Probably the most common type of leadership is the transactional one, and the most desired by followers is the servant one. Transformational leadership mixes together characteristics of both these types of leadership and, by doing so, receives a great deal of attention from researchers.

Transactional leadership uses rewards to motivate people to perform certain tasks. The leader-follower relationship lasts as long as both parties have an interest in continuing it and ends once that interest disappears.

Transformational leadership uses the leader's skills to inspire, develop, and transform people in order to achieve organizational goals. The leader-follower relationship is long-term and may endure even after the parties' business relationship formally ends.

Servant leadership similarly uses the leader's skills to inspire, develop, and transform people, but its goals are people-related rather than organizational. Servant leaders focus on people and their growth, whereas the ultimate goal of transformational leaders remains organizational in nature.

Many authors have suggested that transformational leadership emerged as a completion of the transactional model, and a deeper analysis reveals that transformational and servant leadership are also closely related. The three leadership types are not mutually exclusive. In fact, an effective leader is expected to display characteristics from all three. Such a leader must focus on both people and organizational goals, because people are not the only stakeholders. Shareholders and customers also matter, which makes organizational goals important. A good leader should know the right mix of rewards to use — and when not to use the reward system — because the excessive use of rewards inhibits followers' loyalty and increases the likelihood that they will leave the organization. Equally, a good leader should know how much attention to devote to their own development so that it does not come at the expense of others' growth.

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