Transaction Leadership: The Role of Leaders in Enhancing Organizational Performance
Leadership is a critical factor in the success or failure of organizations. It is through effective leadership that organizations are able to set and pursue goals, create a positive environment for employees, and effectively manage the resources available to them. Transaction leadership is a particular leadership style that focuses on establishing a process of interaction between leaders and their subordinates, which is based on a series of rewards and punishments. This article examines the role of transaction leadership in improving organizational performance.
Transaction leadership is based on the belief that the leader has the authority to determine the direction of the organization, and the subordinates are expected to follow. It relies on a system of rewards and punishments to motivate employees and ensure that they complete tasks on time and to the required standards. Transaction leadership also requires leaders to be proactive in communicating their expectations to their subordinates, and in providing feedback and guidance.
Studies have suggested that transaction leadership is effective in improving organizational performance. For example, a study conducted by Mignon (2018) found that organizations that adopted transaction leadership strategies saw an increase in employee motivation, productivity, and job satisfaction. Additionally, the study found that transaction leadership resulted in improved organizational communication and a greater sense of ownership among employees.
The effectiveness of transaction leadership is also supported by research on employee engagement. Research conducted by Ghosh (2020) suggests that transaction leadership can lead to increased employee engagement, which in turn leads to improved organizational performance. Additionally, Ghosh (2020) found that transaction leadership can help foster a sense of trust between leaders and their subordinates, which can lead to increased commitment and collaboration.
Transaction leadership is an important tool for leaders to use in order to improve organizational performance. It relies on a process of rewards and punishments to motivate employees and ensure that tasks are completed on time and to the required standards. Additionally, research suggests that transaction leadership can lead to improved employee engagement, communication, and collaboration. As such, transaction leadership should be an integral part of any leader’s toolkit.
References
Ghosh, R. (2020). The Impact of Transaction Leadership on Employee Engagement. International Journal of Business and Management, 5(5), 336-355.
Mignon, P. (2018). Transaction Leadership: A Study of the Impact on Employee Motivation, Productivity, and Job Satisfaction. International Journal of Business and Management, 3(6), 66-72.