In: Economics
Describe what is implied by the term "transformational leadership." What accounts for the popularity of this concept? Explain the differences between transactional and transformational leadership.
Transformational relationship refers to the leadership in which the leader influences the team members working under her to raise their productivity and innovate to enable the company to reach greater heights. In this concept, the leader doesn't just direct the team to work efficiently, but creates in each one a sense of belonging and an individualized pride for the company. The worker follows the ideal of the leader and works towards the team's goal as if it's a personal goal and not just a means of earning a pay. This concept is popular since it emphasises on the involvement of the team members in the production process and leads to better progress for the company as a whole. In transactional leadership, the leader has a patronising role while in transformational leadership, he has a idealistic role. In transactional leadership, the emphasis is on rewards and punishment for the performance while in transformational leadership the vision of the team drives the workers to perform. While the former aims at maintaining the profitability of the company, the latter focusses on continuous progress.