These are at best of a simple nature, grounded in self-interest, and designed to uphold the status quo. The subordinates are motivated towards fulfilling certain tasks, and usually controlled by a system of rewards and punishments (Politis, 2002, p. 188). Improved job satisfaction and performance is achieved by the leader identifying their basic needs, defining appropriate transactions, and meeting their minimal expectations.
The transformational leader on the other hand, is an inspirational role model for his or her followers, and has the prime role of shaping the vision for the organisation and the organizational culture, and in managing organizational change. The leader is therefore the key figure for the organization from whom it takes its own identity. Under a transformational leadership style, followers are able “to transcend their own self-interests for collective higher purpose, mission, or vision and to exceed performance expectations” (Howell & Hall-Merenda, 1999). They are intellectually stimulated, and motivated to achieve “extraordinary outcomes” (Bass & Riggio, 2006, p.3).
This study considers which of the above two leadership styles is more effective in terms of developing high quality leader-follower exchange relationships for influencing employees’ job performance. The situational influence or context we shall consider is culture, and the outcome as job performance. As we shall see, within the cultural context, qualities such as individualism, as distinguished from collectivism, uncertainty avoidance and power distance invariably affect how well the leadership style can be effective in terms of the performance of worker-followers. Moreover, transactional leadership is more effective in developing high quality exchange relationships, especially when the environment is stable and the workforce is skilled.