Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What distinguishes a transactional leader from a transformational leader?

1. Focus on short-term outcomes and maintenance

2. Emphasizing inspirational leadership and long-term vision

3. Both are primarily concerned with followers' needs

4. Leaders who avoid decision-making

The correct answer is: Focus on short-term outcomes and maintenance

A transactional leader is primarily focused on short-term outcomes and the maintenance of established processes and structures. This leader adopts a practical approach, ensuring that tasks are completed efficiently and performance is rewarded based on clear agreements and exchanges between leader and followers. Transactional leadership tends to emphasize routine and adherence to established rules and standards, making it effective in situations where tasks are clearly defined and compliance is expected. In contrast, a transformational leader emphasizes inspirational leadership and long-term vision, seeking to inspire and motivate followers to achieve more than what is typically expected. This type of leader often focuses on the development of team members and fosters an environment of creativity, change, and innovation, which is essential for navigating more dynamic and evolving challenges. The distinction is clear: transactional leaders prioritize immediate, tangible results and the operational needs of the organization, while transformational leaders look to inspire a collective vision that aligns with broader organizational goals over the long term. The other options provided do not accurately capture this primary difference in focus between transactional and transformational leadership styles.