By Dr. Gary Deel, Ph.D., J.D.
Faculty Director, School of Business, American Public University
In college, most business and management students take at least one class wherein they’re asked to study different leadership theories and the dynamics affecting leadership success. A common lesson in these classes is the difference between transactional and transformational leadership and their relative efficacies.
Start a management degree at American Public University.
However, these lessons rarely spend enough time discussing the ethics associated with the practice of these different leadership styles. In this article, I’ll talk about the ethical fallout of choosing to be a transactional or transformational leader.
What Is the Difference between Transactional and Transformational Leadership?
First, for readers unfamiliar with these concepts, it’s important to define transactional and transformational leadership. Transactional leaders rely on a strategy of give and take in order to induce support and cooperation from their followers. This strategy comes in two varieties: reward leadership and coercive leadership.
In reward leadership, leaders use positive reinforcement to motivate followers. This is the proverbial “carrot” dangled in front of employees, and it can include such incentives as additional pay (commissions, bonuses, and so on), extra time off, and prestige rewards.
The other type of transactional leader is the coercive leader, who uses not positive but negative reinforcement to drive followers’ behavior. Instead of offering rewards in exchange for desired behavior, these leaders threaten “sticks” or punishments for undesired behavior. These punishments might take the form of strict disciplinary policies for conduct violations.
By contrast, transformational leaders don’t rely on reward or punishment. Instead, they look to inspire followers through belief in a common vision of the outcome of a group’s efforts.
Transformational Leadership Considered More Potent than Transactional Leadership
Philosophers often look at transformational leadership as being more potent than transactional leadership, because the motivating factors are intrinsic rather than extrinsic. Where transactional leaders rely on carrots and sticks, transformational leaders are able to galvanize supporters around a common ideology. They encourage support through a shared belief that the goals of the group are the “right” things to do, in spite of consequences (both desirable and undesirable).
However, in terms of ethical fallout, I like to remind my students in class that the ethics of leadership power cut both ways. English politician and writer Lord Acton famously said that “power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”
Indeed, power has a way of distorting the judgment of talented leaders, and often not for the better. Just as leadership can be wielded in pursuit of great goals, it can also be used to achieve horrific ones.
Transactional Leaders Motivate Followers to Act Negatively
With respect to transactional leadership, a common ethical criticism is that transactional leaders tend to cause followers to ignore the ethical implications of their actions. For example, reward-based leadership soils someone’s otherwise clean conscience.
Such practices are, in effect, bribing followers to perform acts, not because they are ethically sound, but instead because of the reward offered. In this sense, followers in a reward situation could be looked at as hollow shells of human effort without any incentive to consider their own moral compasses.
Likewise, coercive leadership is criticized in the same way, except that instead of bribing followers to induce desired behavior, using “sticks” essentially twists the arms of subordinates into pursuing courses of action that avoid punishment. That behavior occurs not because followers are interested in doing the right things, but because they are trying to sidestep undesirable consequences.
Example of a Good Transformational Leader: Dr. Martin Luther King, Jr.
The ethical landscape of transformational leadership is even more treacherous. One classic example of a transformational leader is Dr. Martin Luther King, Jr.
During the civil rights movement of the 1960s, Dr. King never offered any tangible incentives to the freedom riders and their followers; there were no prizes for showing up at rallies or marches. In addition, there was never any real punishment for abstention from participation in such activism.
In fact, the only certainty about involvement in the civil rights movement was a very real threat of harm from people who resisted the movement’s core ideas, at least in some conservative parts of the country. However, people by the millions followed Dr. King nonetheless, because his charisma and passionate vision inspired them to struggle for a better future for their children.
Dr. King didn’t have to rely on rewards or punishments to induce action from followers, so his followers were more thoughtfully invested in their actions. Ultimately, Dr. King used this power to accomplish positive changes in the laws and culture of our nation.
Adolf Hitler: The Wrong Kind of Transformational Leader
But not all transformational leaders are righteous figures. The other example that I use in class lectures to illustrate the potential variability in transformational leadership ethics is Adolf Hitler.
Now, it should be stated up front that Hitler was a morally repulsive human being who directed some of the most heinous atrocities that have ever been witnessed by mankind. And nothing I say in this article should be confused as admiration or fondness for this monster.
However, that said, it cannot be denied that Hitler’s talents as an orator and an inspiring leader were unmatched. He used his incredible charisma and his passion for nationalism to inspire millions of Germans and other Europeans to “machen Deutschland wieder groß” or “make Germany great again.” Through this effort, he waged the bloodiest war ever fought and brought the world to one of its darkest hours ever.
I often emphasize Hitler’s manipulative abilities in class with this analogy. Imagine how persuasive your town’s mayor would have to be in order to convince you that the “right” or moral thing to do would be to travel to the adjacent town and kill everyone living there. How skilled a speaker would such an argument require in order to be convincing?
And yet, this is precisely what occurred in Nazi Germany in the 1930s. Hitler used the exact same tactics and talents of Martin Luther King, Jr., but with a morality that could not be more different from Dr. King.
And so it is in any leadership context. Leadership talent may be used in both positive and negative ways.
As leaders, it is incumbent upon us to act with integrity. As followers, it is our duty to hold our leaders accountable to ethical standards. In doing so, we can elevate the moral discourse of leadership in modern society.
About the Author
Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.