The impact of transactional leadership style on business
Transactional leadership is a style of leadership that focuses on creating a system of rewards and punishments in order to motivate employees to achieve specific goals. While this style can be effective in certain situations, it can also have a number of negative impacts on a business.
One of the main drawbacks of transactional leadership is that it can lead to a lack of creativity and innovation within the organization. By focusing solely on rewards and punishments, transactional leaders may stifle the creativity and initiative of their employees, who may become afraid to take risks or think outside the box in fear of negative consequences.
Another potential impact of transactional leadership is that it can lead to a high employee turnover rate. When employees feel like they are only being rewarded or punished based on their performance, they may become disillusioned and demotivated, leading to a high turnover rate as employees look for a more positive work environment.
Additionally, transactional leadership can also lead to a lack of employee engagement and a decrease in morale. When employees feel like they are only valued for their ability to meet certain goals or targets, they may become disengaged and feel undervalued, which can have a negative impact on their overall job satisfaction and productivity.
Overall, while transactional leadership can be effective in certain situations, it is important for leaders to balance this style with other forms of leadership, such as transformational or servant leadership, in order to create a positive and productive work environment.