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Leadership and Strategy: Transactional Leadership

According to numerous theories, leadership is a process impacting a team that craves the achievement of a common goal. There exist diverse theories of leadership that play a crucial role in the organizations that employ them. Among such theories is transactional leadership theory that focuses on the operational behavior of leaders and their followers. Talking about this theory of leadership, it entails exchanges between leaders and employees and is used by corporations such as the Apple Company. Moreover, this theory emphasizes the importance of interaction between leaders and employees in order to set a goal, and the two parties take actions to ensure its achievement. Transactional leadership theory plays a significant role in guaranteeing good performance of employees through motivation and aids in improving the quality of products the organization provides. Transactional leadership theory is an efficient method of managing a company because it focuses on motivation to better the employee performance through issuing rewards for quality work.

Transactional leadership theory states that a leader should give the employees directions and encourage them to enhance their productivity through appealing to their interests in various ways. This aspect involves the provision of incentives which may include promotions, bonuses or gifts offered to those who perform better as well as punishment imposed on those that break the policy within the organization (Zabihi, Hashemzehi, & Tabrizi, 2012). This authority is explained by the leader’s responsibilities such as the obligation to achieve the set goals through the employees’ adherence to the instructions provided by the authorities. According to the transactional theory, the interaction between the leader and the employees involves different dimensions such as the contingent reward dimension whereby the head provides the necessary resources and issues awards to the employees with exemplary performance. There is also the active management dimension whereby the leader performs the duty of monitoring the work and inspects deviations from the policies of the company. Passive management is another dimension, according to which the leader issues reward or punishment to the subordinate in view of their performance. What is more, there are some assumptions behind this theory; for example, it holds that the rewards and punishment imposed on the employees act as motivation. Moreover, there is an assumption that the subordinate has to obey the instructions provided by the leader. Thus, transactional leadership theory ensures business success through motivation of the employees.

There are some companies that adopt transactional leadership theory such as the Apple Company. The company operates on performance rewards system whereby the employees’ payment is directly related to their accomplishments. In addition, the company’s leader practices rewarding longtime employees who have worked for more than five years (Parrish, 2013). On the contrary, underperforming employees receive punishment which can be represented even in the form of dismissal. In fact, this system benefits the Apple Company, as it motivates the employees to become committed to their tasks, hence productive organization. Contrariwise, there are firms such as the Sunbeam Corporation that use rather opposing leadership theories. This company employs laissez-faire theory of leadership whereby there is lack of the leader’s control of the employees; thus, there are no rewards to those who have bettered their performance. This company’s operations are contrary to that of Apple since it fires employees to increase profits. As a result, the adoption of laissez-faire leadership theory will hinder the performance of the employees who need motivation to perform and those whose productivity is dependent on supervision.

Leadership theory practiced in a company has several impacts on both the employees and the enterprise as a whole. For instance, in the Apple Company, transactional leadership theory has some effects on the workers, namely it leads to better performance among employees by enhancing employee motivation. In fact, this result is grounded on reward and punishment imposed so that the workers are encouraged to become productive, receiving the future incentive. Moreover, in case the employees underperform, they face a penalty. Importantly, transactional leadership theory plays a fundamental role in assisting one in devising attainable goals. This aspect is a result of short-term planning involved in this theory which is followed by strict supervision to ensure employees operate efficiently (Burke & Cooper, 2016). However, this technique may also lead to lack of creativity among employees due to rigidity and clarity of its structure. Furthermore, due to the rewards imposed, the employees are tied to work under the set policies so that they are discouraged to use their additional skills and talent during their performance. On the contrary, Laissez-faire theory of leadership, as practiced by the Sunbeam Corporation, gives the subordinates an opportunity to make own decisions. As a result, it causes underperformance among the employees. Evidently, the lack of employees’ motivation that consequently leads to poor performance is the reason behind this aspect. Moreover, the lack of supervision encourages the workers to become lazy, hence low productivity. Therefore, the company’s performance deteriorates, leading to undesired outcomes.

I personally choose transactional leadership theory because it is likely to lead to the development of a successful business. This aspect is explained by encouragement it provides to the employees whereby it has a set strategy of rewarding the better-performing employees so that they remain committed. In addition, this theory has a policy of punishing the underperforming employees. Therefore, it makes employees avoid mistakes that may prevent the company from achieving the set goals. I also support transactional leadership theory since it has clear structure. In the company that employ’s this theory, the subordinates performing their duties in accordance with the set rules are always aware of what is expected of them and are trying to achieve their objectives. This aspect boosts their motivation, thereby leading to the production of quality products by the firm. Moreover, these elements promote self-drive among the workers, hence the reduction in the burden of supervision. I support the use of transactional leadership theory, as it also facilitates fast acquisition of results, following the provision of bonuses and awards to the employees according to the amount of time taken to complete a given task. Furthermore, it endorses the production of superior products. I, therefore, support transactional leadership theory because it ensures efficient running of operations in the company. Consequently, it increases the chances of achieving exemplary results, leading to success in the long run.

In my future job, I would practice transactional leadership because it is effective, as it provides motivation to the employees and helps to promote their performance. To begin with, as a leader, I would employ the practice of engaging employees in setting short-term goals. This aspect will enable the employees to be aware of what is expected of them that will promote their self-drive. Moreover, I will give rewards to those who achieve the set goals and those who exceed the expectation of the firm. To support this technique, I will introduce a payment system which will regulate the increases and cuts in the salary in view of the employees’ performance. This tactic will make sure that the employees maximize their efforts to improve the quality of their performance, thereby enabling the business to attain its set goals. However, I will also set a policy that will outline the punishment to those who will underperform and break the rules and regulations of the company. This aspect is meant to enhance the quality of output produced by the enterprise. As a leader, I will also ensure competence in supervision to monitor the progress of the employees to ensure they follow the codes and conducts of the organization. Thus, I will promote the relationship between me and my subordinates.

In conclusion, leadership theories view leadership as the act of influencing the performance of a given group of individuals. Different companies adopt diverse theories to run their business. For instance, transactional leadership theory is focused on the operational behavior and exchanges between the managers and the employees. Under this style, the leader is engaged in motivating the workers to improve their performance in the workplace through the provision of rewards to those who perform well and imposition of punishment on those who break the rules of the organization. This style is evident in the Apple Company where payment of the workers is connected with their achievements in the company. They are also issued with bonuses to encourage them to improve the quality of the output. However, there is a policy that issues severe punishment to the underperforming employees. This aspect involves actions such as dismissal, reduction in wages or demotion. Moreover, there are companies that use other leadership theories; however, they seem to be much less effective and may lead to employees being demotivated and underperforming.


Burke, R. J., & Cooper, C. L. (Eds.). (2016). The fulfilling workplace: The organization’s role in achieving individual and organizational health. New York, NY: Routledge.

Parrish, R. (2013). Apple’s rewards for longtime employees. AppleGazette. Retrieved from

Zabihi, M., Hashemzehi, R., & Tabrizi, K. G. (2012). Impacts of transactional and transformational leaderships upon organizational citizenship behavior. World Applied Sciences Journal, 16(8), 1176-1182. Retrieved from