MGMT2110 L11 Future Leaders Final Report

How do transactional and transformational leadership styles influence employees’ performance?

Group Name: Future Leaders
Fan Cheuk Yin, Ortis (Leader) 20047884
Tang Chun Yip, Roy 20118554
Wan Ho Yin, Terrence 20120129
Fong Yan Yee 20115813
Ng Yee Ni 20048606
Kwon Deaun 20077358

The Hong Kong University of Science and Technology

Abstract This paper reviews several researches investigating on the effect of transactional and transformational leadership to employee’s performance. The two leadership styles are divided into various fundamental components so as to provide inclusive analysis. Illustrating both qualitative reasoning and quantitative proof obtained by MLQ-5X, the analysis clearly demonstrates the linkage between leaderships and staff performance. By examining the two models and quoting the statistics collected from the American Hospital Association Resource Center, the comparison of two leaderships is apparent. Furthermore, the result of investigation also encourages supervisors to explore more advanced and effective way to lead the juniors.

1. History and Definition “Transactional” and “Transformational” leadership was first introduced as two opposite ends of the continuum to differentiate the leading styles of the political leaders by James M. Burns (1978). At a later time, Bernard M. Bass argued that transactional and transformational should be the complement of each other (1990). He further explained and supported his idea by conducting the Multifactor Leadership Questionnaire (MLQ) to study the effect on the subordinates’ satisfaction and effectiveness of both styles (Bass 1985). Later, a more comprehensive MLQ was developed and renamed as MLQ 5X (Bass and Avolio 1990).
The idea of transactional leadership style was mainly based on the exchange principle (Burns 1978). According to the MLQ 5X, the transactional leadership model includes three elements, they are contingent reward, management-by-exception active and passive forms (Bass and Avolio

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