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Notable Example of Transactional Leadership

Category: Leadership
August 24, 2023
2 years ago
3 min read
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"Who is an example of transactional leadership? Discover an example of transactional leadership, a leadership style that focuses on managing tasks and providing rewards for achieving goals. Learn about a notable individual or situation that exemplifies this leadership approach. "
Notable Example of Transactional Leadership

Who is an example of transactional leadership?

An example of a leader known for employing transactional leadership style is Howard Schultz, the former CEO of Starbucks Corporation. Schultz is recognized for his hands-on and results-driven approach to leadership, which aligns with the principles of transactional leadership.

Here are some key characteristics and actions that highlight his transactional leadership style:

  1. Clear Expectations and Goals: Schultz was known for setting clear expectations and goals for his employees. He had a vision for Starbucks and communicated it effectively to the entire organization.

  2. Performance-Based Rewards: Transactional leaders often use a system of rewards and punishments to motivate their employees. Schultz implemented various incentive programs at Starbucks, including stock options and healthcare benefits for part-time employees, to reward exceptional performance.

  3. Emphasis on Efficiency: Transactional leaders prioritize efficiency and effectiveness in achieving organizational goals. Schultz played a pivotal role in streamlining Starbucks' operations and expanding the company's global footprint.

  4. Monitoring and Feedback: Schultz and Starbucks' management team closely monitored performance metrics, such as customer satisfaction, sales, and store profitability. Regular feedback and performance evaluations were integral to the company's culture.

  5. Correction of Deviations: Transactional leaders are quick to address any deviations from established standards or expectations. Schultz was known for intervening when he believed the Starbucks brand was at risk, such as temporarily closing stores for retraining when he felt the quality of products and customer experience were compromised.

It's important to note that while transactional leadership can be effective in certain situations, it also has its limitations. This leadership style may not be as conducive to fostering innovation, creativity, or long-term employee engagement as some other leadership approaches, such as transformational leadership. Transactional leaders are primarily focused on maintaining order, meeting targets, and ensuring compliance.

Schultz's leadership at Starbucks is just one example of how transactional leadership can be applied in a business context. Different leaders may blend transactional and transformational leadership styles to adapt to specific organizational needs and challenges.

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