Transformational vs Transactional in creating LMX relationships

Scientific Essay, 2011

8 Pages, Grade: 9.0 out of 10


Table of Contents

1. Position:

2. Introduction

3. LMX relationships influence on followers job satisfaction and job performance

4. Transactional leadership and building high-quality LMX relationships; culture as situational factor
4.1 Power Distance and transactional leadership
4.2 Uncertainty Avoidance
4.3 Individualism/Collectivism

5 Equal treatment

6 Conclusion

7 References

Some researchers argue that transformational leadership is more effective than transactional leadership in developing high-quality leader-follower (LMX) relationships in order to influence followers’ job performance and job satisfaction. Do you agree or disagree with this statement? Justify your position and arguments

1. Position:

Based on a thorough literature search I take the position that transformational leadership is not necessarily more effective in developing high-quality leader-follower (LMX) relationships than transactional leadership. I argue that there is no such thing as a universal applicable leadership style and that, among others, cultural situational factors determines the most effective leadership style.

2. Introduction

Business today is more competitive and global than ever. Hence greater challenges are imposed on businesses and their leaders at all levels. Companies are forced to be more efficient and effective, i.e. maximize outcome from available resources. Within leadership theory it has repeatedly been established that high-quality LMX relationships increases employee’s performance, i.e. maximizes output. (Wang et al., 2005)(Lussier & Achua, 2010). I.e. developing high-quality LMX relationships, are a means to optimize business performance. In this essay I will utilize motivational theories to support my argument that the quality of LMX relationship, affects followers job performance and satisfaction.

As mentioned companies are furthermore facing global challenges, thus also the challenge of leading employees from different cultures and different countries. In recognized literature it is established that: different cultures should be managed in different ways (Gerstner & Days, 1994) and in order to succeed leadership style should be adapted to the cultural situation (Dorfman & Howell, 1997). Thus if companies want to optimize the quality of LMX relationships, they must adopt the leadership style according to the culture.

In this essay I will utilize three of Hofstede’s renowned cultural dimensions[1] (Hofstede, 1993) to argue that transformational leadership is not always superior in establishing high-quality LMX relationships. In this essay, when referring to transactional and transformational leadership, I will be referring to the definition given by the “Rosetta stone” of leadership theory, Bernhard Bass (Bass, 1985).

3. LMX relationships influence on followers job satisfaction and job performance

It is commonly accepted and well documented in peer reviewed literature that there is a positive relationship between high-quality LMX relationship, followers’ job performance and satisfaction. Lussier and Achua argue that high-quality LMX relationships, leads to not only higher job satisfaction and performance but also lower follower turnover (Lussier and Achua. 2010 Based on Gagnon and Michael 2004, Mueller and Lee 2002, Erdogan and Kraimer 2004).

High-quality LMX relationships are furthermore characterized by increased levels of leader support, guidance, mutual trust and obligations - this is exactly what high-quality LMX relationships are build on. (Lussier and Achua 2010. Graen & Uhl-Bien 1995). LMX relationships are a dyadic process, and hence build on behavior/exchanges between two parties. Turning to motivational theories we can conclude that given the above description of the leader characteristics hold, we can infer that at least two of the major motivational theories, expectancy theory( e.g. Vroom, Porter & Lawler) and equity theory (e.g. Adams) can be utilized to argue that high-quality LMX relationships will increase follower satisfaction and performance.


[1] Individualism/collectivism, Power Distance, Time orientation, Uncertainty avoidance and Masculinity/Feminity

Excerpt out of 8 pages


Transformational vs Transactional in creating LMX relationships
Griffith University  (MBA - Business)
9.0 out of 10
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ISBN (Book)
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transformational, transactional
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Lasse Skaksen (Author), 2011, Transformational vs Transactional in creating LMX relationships, Munich, GRIN Verlag,


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