Ethical values of transactional and transformational leaders

Canadian Journal of Administrative Sciences, Dec 2001 by Rabindra N Kanungo

While Bass and Stiedlmeier (1999) find grounds for the moral legitimacy of the transactional leadership influence process within the worldview of self-interest, Kanungo and Mendonca (1996, p. 73) advocate that this type of influence is devoid of any moral legitimacy. They argue that transactional leaders, in order to serve their self-interest, use control strategies through the exchange of valued resources merely to induce compliance behaviour among their followers. Control strategies do not allow followers any opportunity for autonomy, self-- determination, and self-development. The transformational leadership influence process, on the other hand, is considered to be ethical because transformational leaders use empowering rather than control strategies. Empowering strategies such as demonstrating exemplary behaviour, showing confidence in the follower's ability, verbal encouragement to accomplish task objectives, and so forth increase the follower's capacity for self-determination while pursuing the collective purpose embodied in the leader's vision for the organization.

Burns (1978) makes the same point by suggesting that transactional leaders control their followers by catering to the followers' lower order physical and social needs. Furthermore, these leaders "concentrate on method, technique and mechanisms rather than on broader ends and purposes" (Burns, 1978, p. 405) in order to satisfy the self-interests of organizational members, and thereby manage day-to-day organizational operations. The transformational leader, on the other hand, seeks to satisfy the followers' higher order growth needs, transform the followers' self-interest into collective concerns, and overall "engages the full person of the follower" (Burns, 1978, p. 4). For Burns, transformational leadership is "moral in that it raises the level of human conduct and ethical aspiration of both leader and led" (p. 20), and transactional leadership is not moral in that it is self-absorbing and manipulative.

In contrast to the views of Burns (1978) and Kanungo and Mendonca (1996), Keeley (1995) argues that the ethical justification for transformational leadership is not that clear; neither is the assertion that transactional leadership is devoid of a moral base. According to Keeley (1995), "unless leaders are able to transform everyone and create absolute unanimity of interests, transformational leadership produces simply a majority will that represents the interests of the strongest faction" (p. 77). Such leadership, then, may not always "protect the basic interest of the weak from the self-interest of the strong" (p. 78). This clearly poses a moral problem for transformational leaders. Transactional leadership, on the other hand, does not require from organizational members a "consensus on ends," but rather a simple "consent to means-agreement on rules, rights, and responsibilities" (pp. 86-87) that serve their separate interests. This form of transactional influence can have a moral basis because it serves the interests of all parties concerned.