Leadership Styles in Crisis: Transactional and Transformational Models

This essay provides a comparative and critical evaluation of transactional and transformational leadership models, highlighting their relevance in different organizational contexts and during times of crisis. It examines the characteristics of each model, using real-life examples such as Bill Gates and Jeff Bezos to illustrate their practical application. The essay further emphasizes the importance of ethical practices in leadership, discussing how ethical leadership fosters trust and respect within teams. It also differentiates between business and personal ethics, providing examples of unethical HR practices. The analysis underscores the need for leaders to adapt their styles based on the situation, advocating for transformational leadership during crises to inspire and motivate teams towards innovative solutions.

LEADERSHIP

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Comparison and Critical evaluation of leadership models..........................................................3
Critical evaluation of need of transactional and transformational leaders in the time of crisis...4
Importance of ethical practice in leadership................................................................................5
Ways in which HRM needs to be ethical.....................................................................................5
Business ethics and personal ethics.............................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Leadership can be defined as an ability of an individual to guide, direct and influence the
behaviour of another individual or their followers within the organisation. There are various
leadership styles or models that can be exhibit by different leaders depending upon the need and
nature of the organisation (Daniëls, Hondeghem and Dochy, 2019). The two of such styles or
models is transactional and transformational leadership models which will be compare and
critically evaluated in this essay. Along with this, the evaluation will be accompanied by real life
examples and analysis of need of these models in the time of crisis will be explained. further, the
importance of solid ethical practice will be discussed in this essay. At last, business and personal
ethics will be discussed by citing an example of unethical HR practice.
MAIN BODY
Comparison and Critical evaluation of leadership models
There are different ways in which a group of individuals can be lead in a company but in most of
the cases in modern organisation there can be seen either transactional or transformative models.
Transactional leadership is basically based on control and processes where strict structure of
management is needed. Therefore, here followers are directed towards completing their assigned
roles as agreed with their respective leaders in return for a reward. Here the emphasis is given on
goals and the leaders are highly reactive in nature where for every good deed there is a reward
while for every bad deed there is a punishment. The leader makes all the important decisions and
have strong personality where they set explicit expectations from their followers. If the
transactional process is unclear and employees are not sharing common goals, them the leader
may appear to be practicing coercion. Such type of leadership style is generally employed within
big corporations, military and educational institutions.
There are many benefits of transactional leadership style like it helps in creating a sense
of fairness within the organisation where there is no scope of favouritism is there because the
feedback and rewarding takes place on the basis of performance metrics instead of opinion or
feelings a manager has regarding their subordinate’s performance (Gandolfi and Stone, 2018).
Also, the strict structure of management allows employees to focus on their assigned tasks to get
the rewards.

However, this style is lacking on various grounds such as there is no building of
relationship between manager and employees to derive better engagement, satisfaction and
employee retention. Accordingly, talent may be lost by one company to another. Also,
employees are never encouraged to give innovative ideas by just insisting or strict orders given
by their leaders.
Taking the real - life example of Bill Gates as a transactional leader who is the founder of
Microsoft used to visit teams and ask difficult questions till, he gets satisfied with the team that
they are on the right track and have understanding of the goal. He is called as a transactional
leader because he used to delegate tasks and guide his employees on what he needs and how it
could be done by giving quite little freedom to them (Oc, 2018). For the quick and efficient
achievement of the target, Gates generally emphasize on accomplishment of task.
On the other hand, transformational leadership style focuses on vision and make their followers
aware about what is most important and keep them away from their self-interests. Here, leaders
utilise enthusiasm and charisma in order to motivate their followers and thus are proactive in
nature. Leaders exhibit values and trust motivate through a sense of purpose and conveying
confidence.
The benefits of this leadership model are that employee turnover costs can be lowered
with their higher engagement and making them feel that they a specific and an important role to
play in a team. However, there are chances of employee favouritism for those who are
contributing more towards fulfilling the self-interest of leaders.
By quoting a real - life example of Jeff Bezos who is a founder of Amazon Inc. transformational
leadership style could be understood well. He is popularly recognised as a transformational
leader who undertakes to inspire and motivate his team members to attain more than expectation
(Cortellazzo, Bruni and Zampieri, 2019). With this he is able to ensure that everyone within the
team is committed towards the organisational goal.
Critical evaluation of need of transactional and transformational leaders in the time of crisis
Both transactional and transformational leaders have their relative importance depending
upon the situations prevailing. When the crisis like COVID – 19 occurs, leaders are required to
be calm along with directing and motivating the organisation to overcome and succeed through

the difficult time. Thus, it can be said that transactional leadership is not suggested to be adopted
as it lacks inspiration and motivation (Rudolph, Rauvola and Zacher, 2018). However,
transformational leader helps in leading the organisation to the better future through encouraging
and motivating members within the organisation to give effective ideas on how to overcome
crisis situation by working in a collaborative manner, so that crisis could be managed or avoided.
For example, with the help of their e-commerce website, Jeff Bezos and his team survive
through the COVID-19 crisis where they save their business revenue by introducing safe
delivery concept which can be regarded as an importance of transformational leadership style.
Importance of ethical practice in leadership
With the development and use of ethics, leaders become more effective. The acceptance of
ethical practice leads to ethical decision making and which in turn creates ethical organisation.
By being fair and just leaders provide its team members with less chance to move elsewhere
(Daniëls, Hondeghem and Dochy, 2019). Ethical leaders are helpful in setting a culture of trust
and respect among employees.
Ways in which HRM needs to be ethical
HRM must promote and foster just and fair for all employees. The promotion of employees
should be done on performance basis instead of favouritism. Also rewarding and compensation
should be done on competency, knowledge and skills of employees without involvement of any
personal relationship or interests (Oc, 2018).
Business ethics and personal ethics
Business ethics is the code of conduct imposed on an individual belonging from a certain
profession while the personal ethics are referred to as code of ethics governing the whole life of
an individual. Abusive behaviour and misusing company’s time are examples of unethical HR
practice.

REFERENCES
Daniëls, E., Hondeghem, A. and Dochy, F., 2019. A review on leadership and leadership
development in educational settings. Educational research review, 27, pp.110-125.
Gandolfi, F. and Stone, S., 2018. Leadership, leadership styles, and servant leadership. Journal
of Management Research, 18(4), pp.261-269.
Oc, B., 2018. Contextual leadership: A systematic review of how contextual factors shape
leadership and its outcomes. The Leadership Quarterly, 29(1), pp.218-235.
Cortellazzo, L., Bruni, E. and Zampieri, R., 2019. The role of leadership in a digitalized world: A
review. Frontiers in psychology, 10, p.1938.
Rudolph, C. W., Rauvola, R. S. and Zacher, H., 2018. Leadership and generations at work: A
critical review. The Leadership Quarterly, 29(1), pp.44-57.