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Transactional leaders use conventional reward and punishment to gain compliance from their followers.

Interaction and Motivation

They have continuing, often unspoken interaction that take such forms as:

"Do as I say and you will get a raise."
"Meet this quota or you will get fired."

These are extrinsic motivators which bring only minimal compliance from followers. Some followers will supply their own internal (intrinsic) motivation such as pride in their work, but this is a matter of chance.

Transactional leaders accept the goals, structure and culture of the existing organization. They must do so because this type of leadership is ineffective at bringing significant change.

Types of Transactional Leadership

There are two components of Transactional Leadership

Contingent Reward

Here the leader provides rewards if, and only if, subordinates perform adequately and/or try hard enough. It contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments

Management by exception

In this case the leader does not seek to change the exsiting working methods or subordinates so long as performance goals are met. He/she only intervenes if something is wrong. This can be "active," where the leader monitors the situation to anticipate problems, or "passive," where the leader does nothing until a problem or mistake has actually occurred.

Personal Characteristics of Transactional Leaders

Transactional leaders tend to be directive and sometimes dominating. They tend to be action oriented.

See also

References & Bibliography

Key texts



  • Avolio, B. J., Bass, B. M., & Jung, D. I. (1999). Re-examining the components of transformational and transactional leadership using the Multifactor Leadership Questionnaire. Journal of Occupational & Organizational Psychology, 72(4), 441-462.

Additional material



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