Business leader poses in an office along with colleagues working.

Transactional vs. Transformational Leadership: A Comparison


While theories abound on the approaches of an effective leader, two distinct motivational styles have gained increasing attention in the business world and are often compared to each other: transactional and transformational leadership.

Transactional Leadership

As defined by, transactional leadership is built upon contingency — subordinates know they will receive a reward for a job well done or chastisement for one not completed successfully. Transactional leaders define their expectations transparently so all involved parties know what is required of them. Transactional leadership depends upon followers accepting full responsibility for their work.

Transformational Leadership

Transformational leadership, according to CIO, uses motivation and inspiration to encourage subordinates to innovate and bring about change within their job functions. Transformational leadership thrives in an environment that celebrates worker independence. Through this, workers gain autonomy over the decisions relating to their responsibilities. Followers can become transformational leaders themselves through training via mentorship.

Developing Leadership Styles

Both styles of leadership require unique characteristics for their implementation and offer different advantages to employee motivation. According to a study described in the Online Journal of Workforce Education and Development, transactional and transformational leadership styles can work alongside each other and bring value to each other through interaction.

Career Paths Best Suited to Different Styles of Leadership

Each of the styles of leadership is distinct in how it achieves results. Due to this, each has career paths that suit them better than the other. Individuals who are interested in exploring a particular career path may need to consider which one meshes with their type of leadership.

Careers Based on Transactional Leadership

Transactional leadership builds on the premise that organized action brings results. Among the careers that transactional leaders are best suited are office managers, coaches, military leaders, and entrepreneurs.

Careers Based on Transformational Leadership

Transformational leadership understands that ideas drive results. Among the careers that transformational leaders excel are project managers, human resource managers, management consultants, politicians, and businesspeople.

Transactional vs. Transformational Leadership: Development and Training

Individuals can receive training to develop leadership characteristics. Advanced university degrees such as Norwich University's online Master of Science in Leadership program are an excellent way to refine and strengthen leadership skills. The curriculum focuses on:

  • Strategic communication
  • Personal ethics
  • Dynamic problem-solving
  • Management theories and implementation strategies
  • Emotional intelligence
  • Development and implementation of institutional change

These skills are necessary for individuals considering either a transactional vs. transformational leadership approach.

Concentrations Offered

Norwich University's Master of Science in Leadership (MSL) program offers several concentrations where students can gain specialized transactional and transformational leadership techniques. Among these are:

  • Public Sector/Government/Military Leadership: Engages students on different issues, requiring a response that may bring about positive cultural change.  
  • Organizational Leadership: Incorporates organizational behavior and emotional intelligence to understand the inner workings of an enterprise.
  • Leading Change Management Consulting: Analyzes practices using metrics and develops initiatives in line with modern best practices to bring about change.
  • Human Resource Leadership: Focuses on human resource management and how companies can address emerging concerns such as globalization, diversity and technology in the workplace.

Courses Offered

Below are core courses of the Norwich MSL program:

  • Leadership Fundamentals: Offers an in-depth exploration of leadership styles and methods of implementation for specific workplace environments.
  • Emotional Intelligence (EQ) & Leadership Style: For sound leadership, students occasionally need self-reflection and introspection to develop better interpersonal skills. This course explores thought patterns so students understand how their leadership style impacts others.
  • Leading Change in Organizations: This course reveals leadership and management perspectives on a potential change in an organization, including theoretical and conceptual models of change.

The following courses are designed for students who choose the specific curriculum concentrations:

Strategic Organizational Behavior: Designed for students who choose the Organizational Leadership concentration, this course teaches methods to adapt the strategic alignment of businesses to better suit individual behaviors. Using both transactional and transformational leadership lenses, students can appreciate different organizational strategy models and corporate practices.

Human Resource Leadership: This course focuses on leadership in a human resources capacity, including subjects such as the impact of technology and globalization on productivity as well as organizational capabilities.

Theories and Innovative Practices of Public Sector/Government/Military Leadership: Designed for students choosing the Public Sector/Government/Military Leadership concentration, the course takes an in-depth look at the various economic and social transformations that leaders in the military or government sectors face in today’s world.

Change Management Consulting: Addressing students who have chosen to study Leading Change Management Consulting, the course equips them to develop the tips, tools, and techniques to be a successful consultant on change management.

Benefits of an Advanced Leadership Degree

An advanced leadership degree offers a broader knowledge scope and increases the employability of graduates. The job outlook for most leadership positions associated with these concentrations looks promising. For instance, employment of human resources managers is projected to grow 9% from 2016 to 2026, and administrative service managers are likely to see a 10% growth over the same period.

Furthermore, because of their expertise in leadership, graduates also have the potential to earn more, depending on the company. For instance, according to BLS, a financial or insurance administrative manager can earn a median annual wage of up to $104,780, while a local government administrative manager can earn up to $93,630. The combination of increased employability and a better salary makes pursuing an advanced leadership degree a compelling option.

Choosing an Advanced Leadership Degree

Transactional vs. transformational leadership: students interested in pursuing these paths may find the best place to start is with a leadership degree that covers the core elements of the field. Norwich University’s online Master of Science in Leadership program helps individuals develop leadership styles and the skills to lead and inspire positive change in their organizations. This online program provides the opportunity to explore various leadership perspectives and immediately apply learned skills to the workplace to make an impact.

As the nation’s oldest private military college, Norwich University has maintained a leadership position in innovative education since 1819. Through its online programs, Norwich delivers relevant and applicable curricula that allow its students to make a positive impact on their places of work and their communities.


Recommended Readings
The Pinnacle of Leadership: How to Become a CEO
Manager vs. Leader: Understanding How to Lead in a Business Environment
Leadership Curriculum—Mapping Your Education

Transactional Leadership,
What Is Transformational Leadership? A Model for Motivating Innovation, CIO
Transactional and Transformational Leadership: A Constructive/Developmental Analysis, Academy of Management Review
The Interaction of Transactional and Transformational Leadership, Online Journal of Workforce Education and Development
Master of Science in Leadership, Norwich University
Online Organizational Leadership and Management Master’s Degree, U.S. News & World Report
Administrative Services Managers – Job Outlook, Bureau of Labor Statistics
Human Resource Managers – Job Outlook, Bureau of Labor Statistics

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