Effectiveness Correlates of Transformational and Transactional Leadership: A Meta-Analytic Review of
The MLQ Literature
By: Kevin B. Lowe, K. Galen Kroeck, Nagaraj Sivasubramaniam
Lowe, K. B., Kroeck, K. G., & Sivasubramaniam, N. (1996). Effectiveness correlates of transformational and
transactional leadership: A meta-analytic review of the MLQ literature. The Leadership Quarterly, 7(3), 385-
415. http://dx.doi.org/10.1016/S1048-9843(96)90027-2
***Note: Figures may be missing from this format of the document
Made available courtesy of Elsevier: http://www.elsevier.com/
A meta-analysis of the transformational leadership literature using the Multifactor Leadership Questionnaire
(MLQ) was conducted to (a) integrate the diverse findings, (b) compute an average effect for different
leadership scales, and (c) probe for certain moderators of the leadership style-effectiveness relationship.
Transformational leadership scales of the MLQ were found to be reliable and significantly predicted work unit
effectiveness across the set of studies examined. Moderator variables suggested by the literature, including level
of the leader (high or low), organizational setting (public or private), and operationalization of the criterion
measure (subordinate perceptions or organizational measures of effectiveness), were empirically tested and
found to have differential impacts on correlations between leader style and effectiveness. The operationalization
of the criterion variable emerged as a powerful moderator. Unanticipated findings for type of organization and
level of the leader are explored regarding the frequency of transformational leader behavior and relationships
with effectiveness.
INTRODUCTION
Burns (1978) identified two types of leadership styles, transformational and transactional leadership. The
transformational leader construct was suggested by Burns based on a qualitative analysis of the biographies of
various political leaders. The notion of a transformational leadership style as a construct has also been
addressed in the works of several scholars (Bass 1985; Conger & Kanungo, 1987, 1988; House, 1977;
Podsakoff, McKenzie, Moorman, & Fetter 1990; Tichy & Devanna, 1986; Trice & Beyer, 1986; Yukl, 1989)
with varying degrees of specificity and rigor. The transformational leader has been characterized as one who
articulates a vision of the future that can be shared with peers and subordinates, intellectually stimulates
subordinates, and pays high attention to individual differences among people (Yammarino & Bass, 1990a). This
transformational leader was posited as a contrast to the transactional leader who exchanges valent rewards
contingent upon a display of desired behaviors (Burns, 1978; Waldman, Bass, & Einstein, 1987).
Bass (1985), viewing the transformational and transactional leadership constructs as complementary constructs,
developed the Multifactor Leadership Questionnaire (MLQ) to assess the different leadership styles. Even
though a substantial research base exists using the MLQ, relationships among the various components of
transformational and transactional leadership constructs and leader effectiveness, in different settings, is not
well understood. A comprehensive review and analysis of the research using the MLQ is necessary to better
understand the nomological connections which summarize the validity evidence for these constructs. The
purpose of this paper is to conduct a meta-analytic review of the literature which uses the MLQ to describe the
transformational and transactional leadership constructs, and to analyze the research in which these constructs
have been empirically linked to leader effectiveness.
LITERATURE REVIEW
Leadership as a Dimensional Construct
In developing the construct, Burns (1978) drew from the literature on traits, leadership styles, leader-member
exchange research, as well as his own observations, and put forth the idea of a transformational and
transactional leadership style. Burns considered the transformational leader to be distinct from the transactional
leader, where the latter is viewed as a leader who initiates contact with subordinates in an effort to exchange
something of value, such as rewards for performance, mutual support, or bilateral disclosure. At the other pole
of the leadership style dimension, Burns viewed the transformational leader as one who engages with others in
such a way that the leader and the follower raise one another to a higher level of motivation and morality (cf.
Kuhnert & Lewis, 1987), not easily explained in traditional instrumental exchanges. Higher aspirations or goals
of the collective group are expected to transcend the individual and result in the achievement of significant
change in work unit effectiveness. Burns believed that all managers could be classified by leadership style
according to their propensity for transactions with versus transformation of subordinates.
Leadership as a Complementary Construct
Bass (1985) viewed the transformational/transactional leadership paradigm as being comprised of
complementary rather than polar constructs. He integrated the transformational and transactional styles by
recognizing that both styles may be linked to the achievement of desired goals and objectives. In this view, the
transformational leadership style is complementary to the transactional style and likely to be ineffective in the
total absence of a transactional relationship between leader and subordinate (Bass, Avolio, & Goodheim, 1987).
In line with this reasoning, a given manager may be both transformational and transactional. Tosi (1982) noted
that supporting every charismatic leader is someone with the ability to manage the mundane, day-to-day events
that consume the agendas of many leaders. Transformational leadership thus augments transactional
management to achieve higher levels of subordinate performance with the primary difference residing in the
process by which the leader motivates subordinates and in the types of goals set. The ability of the
transformational leader to obtain performance beyond basic expectations of workers has been labelled the
"augmentation hypothesis" (Waldman, Bass, & Yammarino, 1990).
Bass (1985) characterized the transactional leader as one who operates within the existing system or culture, has
a preference for risk avoidance, pays attention to time constraints and efficiency, and generally prefers process
over substance as a means for maintaining control. The skillful transactional leader is likely to be effective in
stable, predictable environments where charting activity against prior performance is the most successful
strategy. This leader prototype is consistent with an equitable leader-member exchange relationship where the
leader fulfills the needs of followers in exchange for performance meeting basic expectations (Bass, 1985;
Graen & Cashman, 1975).
Transformational leaders seek new ways of working, seek opportunities in the face of risk, prefer effective
answers to efficient answers, and are less likely to support the status quo. Transformational leaders do not
merely react to environmental circumstances—they attempt to shape and create them (Avolio & Bass, 1988).
Transformational leaders may use transactional strategies when appropriate, but they also tend to utilize
symbolism and imagery to solicit increased effort. The leader accomplishes this by raising the level of
intellectual awareness about the importance of valued outcomes, by raising or expanding individual needs, and
by inducing a belief in transcending self-interest for the sake of the team or organization (Bass, 1985, p. 20).
Bass's conceptualization of the transformational leader extended House's (1977) idea of the charismatic leader
by incorporating the individualized consideration and intellectual stimulation aspects. Graham (1988)
differentiated the ideas of these theorists by concluding that House's conceptualization of Charisma
characterizes followers as dependent on the leader—simply "automotors" responding to the leaders' charismatic
acts. Bass sees followers as those who demonstrate free choice behavior and develop follower autonomy within
the overlay of the leader's vision. Thus, true transformational leadership requires employee empowerment, not
employee dependence, according to Bass' conceptualization. It is also important to note that Avolio and Bass
(1988) see these constructs as splitting into two dimensions the aspects of some widely utilized leadership
scales (e.g. the Initiating Structure construct from the Ohio State studies). The transactional leader may clarify
the task structure with the "right way" to do things in a way that maintains dependence on the leader for
preferred problem solutions. The transformational leader on the other hand may provide a new strategy or
vision to structure the way to tackle a problem, endowing the subordinate's sovereignty in problem solving.
Despite the intuitively compelling articulation of transformational leadership in the early stages of
conceptualization, little systematic evidence was available to validate the construct. Unlike its complementary
construct, transactional leadership, no instrument was available to test the predictive validity, limitations, and
applications of the theory. In the following section we review the development of the MLQ and the research
base that has accumulated using this instrument.
Development of the MLQ
Bass (1985) developed an instrument to measure both transactional and transformational leader behavior and to
investigate the nature of the relationship between these leader styles and work unit effectiveness and
satisfaction. The resulting instrument, the Multifactor Leadership Questionnaire (MLQ), was conceptually
developed and empirically validated to reflect the complementary dimensions of transformational and
transactional leadership with sub-scales to further differentiate leader behavior. The initial 142 item pool for the
MLQ was developed by combining a review of the literature with an open-ended survey asking 70 executives
for their descriptions of attributes of transformational and transactional leaders. Factor analysis indicated five
scales with acceptable reliabilities. The final 73 items were factor analyzed again in a later study (Hater & Bass,
1988) with similar results. The MLQ has since acquired a history of research as the primary quantitative
instrument to measure the transformational leadership construct.
Three of the five scales were identified and defined as characteristic of transformational leadership (Bass 1985;
Bass, Avolio, & Goodheim, 1987). They are as follows:
Charisma: The leader instills pride, faith and respect, has a gift for seeing what is really important, and
transmits a sense of mission which is effectively articulated.
Individualized Consideration: The leader delegates projects to stimulate learning experiences, provides
coaching and teaching, and treats each follower as a respected individual.
Intellectual Stimulation: The leader arouses followers to think in new ways and emphasizes problem solving
and the use of reasoning before taking action.
Two scales were identified and defined as being characteristic of transactional leadership (Bass, 1985; Bass,
Avolio, & Goodheim, 1987):
Contingent Reward: The leader provides rewards if followers perform in accordance with contracts or expend
the necessary effort.
Management-by-Exception: The leader avoids giving directions if the old ways are working and allows
followers to continue doing their jobs as always if performance goals are met.
The anchors of the leadership style scales incorporated a magnitude-estimation ratio to each other of 4:3:2:1:0
with "frequently, if not always " and "not at all" serving as the endpoint anchors (Bass, Cascio, & O'Conner,
1974). The transformational factors of Charisma, Individualized Consideration, and Intellectual Stimulation
have been identified in earlier research as being highly correlated with Charisma accounting for roughly 60% of
the variance in the transformational scale (Bass, 1988a). Our own meta-analysis of the intercorrelations
(Appendix 1) indicate a high intercorrelation between transformational scales and between the transformational
factors and Contingent Reward.
The MLQ has been examined in over 75 research studies, appearing in journals, dissertations, book chapters,
conference papers, and technical reports. The instrument has been used to study leaders in a variety of
organizational settings such as manufacturing, the military, educational and religious institutions, and at various
levels in the organization including first line supervisors, middle managers, and senior managers. MLQ scales
have been related to a range of effectiveness criteria such as subordinate perceptions of effectiveness, as well as
to a variety of organizational measures of performance such as supervisory ratings, number of promotion
recommendations, military performance grades and such objective measures as percent of goals met, pass rate
on educational competency exams, and financial performance of the work unit. Studies using subordinate
measures of effectiveness as a criterion have occasionally been criticized on the basis of mono-method bias
because they typically utilize the effectiveness measure embedded in the MLQ (Avolio, Yammarino, & Bass,
1991; Bass & Avolio, 1989). The effect of using subordinate perceptions of effectiveness rather than
organizational measures is a point we shall return to later in the paper.
