Towards the Theory of Transformational and Transactional Neuroleadership

Adel Tajasom and Zainal Ariffin Ahmad © 2009

Our research focuses on expanding neuroleadership into Transformational and Transactional Neuroleadership. As a new field of study, neuroleadership offer insights into leadership behaviours from the lens of neuroscience. Similar to neuroeconomics which draw from experimental economics and psychology, neuroleadership draws from leadership, neuroscience and psychology and looks at elements of leadership such as awareness of self, awareness of others, insight, influence and decision making. The common focus area of research is decision making which has been studied extensively from the economic standpoint, but not from leader’s behavior or style. In our study, we explore the cognitive aspect of decision making and unravel the process involving the human brain. As leadership theories cannot explain the leader’s behaviour in decision making, we look to neuroscience to understand this phenomenon. In this aspect we use neuroimaging (EEG) to identify the specialized regions in the brain related to decision making and to find out how managers make decision given their leadership style (transformational/transactional). The methodological and ethical issues will also be discussed.

Key words: Decision Making, Neuroleadership, Leadership Behaviour, Leadership Style, Transformational Leadership, EEG

Paper to be presented at the International Annual Seminar and Workshop, Kyoto Sangyo University, Kyoto 27th -28th March 2009.

Transactional vs Transformational Neuroleadership

- Bass: Transactional and Transformational dimensions are separate.

- Burns: Transactional and Transformational are opposite ends of the leadership continuum.

Decision Making & Neuroleadership


Whereas decision making has been studied extensively from the economics standpoint, not so from leadership behavior or style.

- Whereas leadership theories cannot explain the leader’s behavior of decision making, we explore the neuroscientific aspects of decision making, i.e. from the neuroleadership perspective.

- Therefore, we extend Bass’ work on Transactional and Transformational Leadership intoTransactional and Transformational Neuroleadership.

Transformational Neuroleadership


For transformational leaders, decision making is based on cognitive rewards.
They provide a climate of trust and draw out the followers’ higher order needs to perform beyond expectations.
Transformational leaders inspire their followers to make decision that transcend self-interests.
This is counter to the Classical Decision Theory (CDT).

Transactional Neuroleadership


For transactional leaders, decision making is based on contingent rewards.
They clarify the options and outcomes for the followers to maximize gains or benefits to perform meeting expectations.
Transactional leaders interact with their followers to make decision to suit self-interests.
This is in line with the Classical Decision Theory (CDT).