Ethical values of transactional and transformational leaders

Ethical leadership literature (Bass & Steidlmeier 1999; Kanungo & Mendonca, 1996) suggests that authentic transformational leadership must be based on some moral foundation. Such literature is not as clear however on whether transactional leadership can have moral foundation as well. The paper argues that transformational and transactional leadership behaviours are judged to be ethical based on two different sets of values, motives, and assumptions. These values, motives, and assumptions are grounded in two types of ethical perspective for understanding the behaviour of the two types of leaders. Transformational leaders have an organic worldview and moral altruistic motives grounded in a deontological perspective. Transactional leaders, on the other hand, have an atomistic worldview and mutual altruistic motives grounded in a teleological perspective.