The study of leadership and management is pivotal to the field of Organisational Behaviour (OB). These disciplines are not merely academic but form the foundation of how organisations function, adapt, and achieve their objectives. Leadership, in particular, is often the driving force behind employee motivation, organisational culture, and overall performance. Over the years, research has distinguished between different leadership styles, particularly transactional leadership and transformational leadership (Bass & Riggio, 2006). Understanding these styles and their impact is crucial for navigating contemporary organisational challenges, especially in an era marked by digital transformation, remote work, and diverse workforce dynamics.
Defining Leadership and Management
While often used interchangeably, leadership and management serve distinct functions within an organisation. Management is generally concerned with planning, organising, and controlling organisational resources to achieve defined goals. In contrast, leadership focuses on influence, vision, and direction-setting. As Robbins and Judge (2019) explain in Organisational Behaviour, management maintains systems and processes, whereas leadership inspires people to transcend routine tasks and reach higher levels of performance.
Transactional vs Transformational Leadership
Transactional leadership is a style based on clear structures, roles, and reward systems. It assumes a rational model of human behaviour in which individuals are motivated by rewards and penalties. In contrast, transformational leadership is visionary and seeks to elevate the interests of employees, aligning them with organisational goals (Bass & Avolio, 1994). Transformational leaders are characterised by inspirational motivation, intellectual stimulation, individualised consideration, and idealised influence.
A study by Bhattacharyya and Mohanty (2025) found that transformational leadership led to higher levels of employee satisfaction and innovation, especially in virtual team environments, while transactional leadership ensured procedural adherence and short-term productivity gains. Both styles can be effective but are context-dependent.
Impact on Organisational Behaviour
Research demonstrates that transformational leadership contributes positively to key OB variables such as job satisfaction, employee engagement, organisational citizenship behaviour (OCB), and commitment (Northouse, 2018). Ezeanaka (2025) identified transformational leaders in the hospitality sector of River State, Nigeria, as significantly improving service delivery and staff morale, compared to their transactional counterparts.
Similarly, Setyawibawa and Tahir (2025) noted that transformational leadership significantly influenced employee innovation in the National Broadcasting Commission (NBC), while transactional leadership was linked to routine task completion. These insights highlight the differentiated impact of leadership styles on employee behaviour and organisational outcomes.
Contemporary Challenges: Digital and Remote Leadership
The rise of remote work and digital communication platforms has transformed how leadership is exercised. Virtual teams demand leaders who can foster trust without physical presence and communicate effectively across time zones and cultures. Hosseinpour et al. (2024) argue that digital leadership requires technological fluency, emotional intelligence, and asynchronous communication skills.
In this context, transformational leadership becomes even more critical. Lindov (2025) observed that in digital settings, leaders who emphasised shared vision and emotional connectivity helped virtual teams perform better than those relying solely on transactional tactics.
Leadership, Power, and Organisational Politics
Leadership cannot be separated from the dynamics of power and organisational politics. According to Pfeffer (2010), decision-making within organisations often reflects a complex negotiation of interests, influence, and coalitions, rather than purely rational analysis. Leaders wield formal and informal power to navigate these dynamics. Transformational leaders, in particular, must manage political environments by aligning stakeholders to shared values and vision.
Ochuko et al. (2025) examined the Nigerian public health sector and found that leadership efficacy depended on the leader’s ability to manoeuvre political constraints while maintaining ethical standards and motivating staff.
Case Examples
- Apple Inc. and Steve Jobs: Jobs exemplified transformational leadership by inspiring innovation through a clear vision and deep emotional connection with the brand (Isaacson, 2011). His leadership transformed Apple into a market leader, highlighting how transformational qualities can revolutionise a company.
- McDonald’s: Known for its transactional leadership practices, McDonald’s emphasises performance-based rewards and standardised procedures to maintain consistency across global franchises (Robbins & Judge, 2019). This structure works effectively in its operational context.
Integrating Styles for Effective Leadership
Modern leaders are increasingly required to blend both styles. According to Abdullahi and Agbana (2025), leaders who integrate transformational and transactional components are better equipped to handle strategic shifts while maintaining operational discipline. This is especially true in hybrid work environments, where flexibility must be balanced with accountability.
Practical Implications for Organisations
- Leadership Development: Training programmes must equip managers with transformational competencies, including empathy, communication, and vision-setting.
- Technology Integration: Leaders must be comfortable with digital tools to manage remote teams effectively.
- Diversity and Inclusion: Transformational leadership has been shown to support inclusive practices by promoting psychological safety and openness (Ahmad et al., 2025).
The intersection of leadership and management in organisational behaviour is more relevant than ever in the face of rapid technological and social change. Transformational leadership, while not without challenges, offers a robust framework for inspiring innovation, commitment, and adaptability. Transactional leadership, on the other hand, provides structure and stability. For organisations to thrive, especially in digital-first and globalised environments, a nuanced and integrated leadership approach is essential.
References
Abdullahi, N. & Agbana, O. (2025). Leadership Style and Employees’ Innovative Behaviour: A Study of National Broadcasting Commission (NBC). ABUJA Journal of Business and Management. https://ajbam.com.ng
Ahmad, S., Quraishi, A.A.M. & Younus, S. (2025). Impact of Green Transformational and Transactional Leadership on Green OCB. The Critical Review of Social Sciences. https://thecrsss.com
Bass, B.M. & Avolio, B.J. (1994). Improving Organisational Effectiveness Through Transformational Leadership. Thousand Oaks, CA: Sage.
Bass, B.M. & Riggio, R.E. (2006). Transformational Leadership (2nd ed.). Mahwah, NJ: Lawrence Erlbaum.
Bhattacharyya, M. & Mohanty, M. (2025). Leadership Style of Teams in Virtual Work Environments in India. IJRAR. https://academia.edu
Ezeanaka, P.S. (2025). Leadership Styles in River State Five-Star Hotels. IJIPSD. https://seahipublications.org
Hosseinpour, M., et al. (2024). Leading in the Age of Remote Work: Strategies for Digital Transformation. Journal of Leadership in Digital Age.
Lindov, I. (2025). Evolution of Classical Leadership Styles in Digital Environments. Proceedings of the International Conference on Business and Economics. https://sciendo.com
Northouse, P.G. (2018). Leadership: Theory and Practice (8th ed.). London: SAGE.
Ochuko, R.E., Obi, E.F. & Ovuoh, C.R. (2025). Interrogating Leadership Epochs in National Agency for Food and Drug Administration. IJPADS. https://ijpads.com
Pfeffer, J. (2010). Power: Why Some People Have It and Others Don’t. New York: Harper Business.
Robbins, S.P. & Judge, T.A. (2019). Organisational Behaviour (18th ed.). Harlow: Pearson.
