Ethical values of transactional and transformational leaders

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

While relating to other people, the idiocentric transactional leader considers the self to be atomistic or separate from others, whereas the allocentric transformational leader considers the self as organic or inseparable from others. With the atomistic view of self, the transactional leader puts high value on personal independence (or complete autonomy) and protection of individual rights. On the other hand, with the organic view of self, the transformational leader puts more value on interdependence, conditional autonomy and meeting social obligations toward others. With an atomistic view of self, the transactional leader considers people's relationships to each other in organizations to be contractual in nature. For such a leader, social and legal contracts form the basis of social interactions and exchange of resources among people. The leader's and the followers' personal goals and outcomes are achieved though social contract. A mutually beneficial contract, as opposed to a contract that benefits only one member in the exchange relationship, is considered ethical. The principle of utilitarianism or teleological ethics (an act is ethical if it promotes the greatest happiness of the greatest number) as advocated by Mill (1967), provides the moral justification for the mutually beneficial contracts that transactional leaders value. An allocentric transformational leader with an organic view of the self considers obligatory activities toward others as ideal forms of action or as a moral duty to achieve the common good. Thus, the nature of goals that a leader strives for are viewed as idealistic by the transformational leader whereas they tend to be viewed as purely pragmatic by the transactional leader.

The above discussion with respect to the assumptions about the nature of goals of a leader implies that for the idiocentric transactional leader the means and ends reflected in actions are judged with an outcome or a teleological orientation. Such a leader believes that ends justify means. "All is well that ends well" becomes the motto of the transactional leader. If the social contract ends in mutually beneficial results, then the means the leader has used are morally justified. The transformational leader, on the other hand, considers social obligations as his/her moral duty because they serve the higher purpose of benefiting relevant others (the group or organization from which the leader is inseparable) without any calculation of personal gain in return. This represents a deontological orientation that considers actions to be morally right when they stem from a sense of duty or obligation toward others. The transactional leader deals with other people simply as a means to achieve personal goals through the transaction of valued resources, whereas the transformational leader considers other people as ends in themselves and therefore attempts to transform their values, attitudes, and behaviour using empowering influence strategies. The foregoing is consistent with Kant's categorical imperative (Bowie, 1998). As pointed out earlier, the interests or motives of the transactional idiocentric leader are self-- centric, and the intents of the transformational allocentric leader are socio-centric. The associated ethical behavioural strategy to influence others is to frame the social contract, and to exchange resources in social interactions in the case of transactional leadership. This strategy is a manifestation of utilitarian or mutual altruism. In the case of transformational leadership, the behavioural influence strategy is to empower others by modeling or exemplary behaviour (Conger & Kanungo, 1998). This strategy is a manifestation of moral altruism.