Transactional leadership is a style of managing, which determines the supreme role of manager within the organization. The main principle of transactional leadership is the fair distribution of benefits and punishments. If you work well, you receive what you earn, if you do your job badly, you will receive a penalty or a punishment. The policy of this style is a fair attitude to everyone, – you receive what you deserve. Transformational leadership is a type of leadership that brings positive experience to those people who follow the transformational leader (Ruggieri, 2013).
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The goal of this leadership style is to improve skills and help everybody who needs support. In other words, this leadership is targeted on a team work, where everybody tries to help each other in achieving his/her goals. These two leadership styles are effective and it is difficult to say which one is better because everything depends on the situation. However, transformational leadership seems to be more efficient because a leader is interested not in the worker’s productivity, but in the methods of its improving (Sun, & Anderson, 2012).
Ethical leadership includes ethical behavior towards employees, respect of their rights, needs and desires. Ethical leadership is based on trustworthy relations between employer and employee. A leader treats everybody fairly and honestly; this style of managing also requires clear and coherent ethical framework. Ethic is the key issue of this leadership style, thus all issues concerning ethic are open for discussion (Zenger, 2012).
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Ethical leadership is important within any organization as it is the fundament for establishing good relations among employees and creating a friendly atmosphere within the organization. A company that establishes ethical leadership as the principal concept of its behavior will succeed better than any other. Employees who are treated fairly perform their obligations on a high level because they are satisfied with the current situation in the company and thus try to do their best.
