The Different Impact between Transformational Leadership and Transactional Leadership on Competitive Advantage

The objective of this is research is to investigate the influence of leadership styles towards developing company’s competitive advantages. This research is doing for some sectors of companies in Surabaya of Indonesia, i.e. manufacturing, service, retail, financial service, distributor, and property sectors. Furthermore, this research investigates the difference results of the model among those sectors. There are 82 companies as the research objects in and the unit analysis. Each company consist of five respondents, which is in totals are 410 respondents, those are managers, supervisors, and staffs. They answer the questionnaire as the tool in this research. This research finds that compares to transformational leadership style, transactional leadership style has more influence in developing the competitive advantage of companies in Surabaya. Intellectual stimulation is the characteristic of transformational leadership style that highly influencing the development of competitive advantage. While giving commends to employees that have extraordinary performance is the dominant characteristic of transactional leadership style in the research model. The ways the leadership styles use in developing their competitive advantages also different each other. Transformational leadership more focus on quality-product innovation; transactional leadership more focus on delivery dependability and time to market.