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Concept
Transactional leadership
Summary
Transactional leadership (or transactional management) is a type of leadership style that focuses on the exchange of skills, knowledge, ressources, or effort between leaders and their subordinates. This leadership style priortizes individual interests and extrinsic motivation as means to obtain a desired outcome. It relies on a system of penalties and rewards to achieve short-term goals.
Although James Downton is generally credited with coining the term "transactional leadership", James MacGregor Burns expanded upon the concept in his influential 1978 book Leadership.
[Transactional] leadership occurs when one person takes the intitiative in making contact with others for the purpose of an exchange of valued things. ... Their purposes are related, at least to the extent that the purposes stand within the bargaining process and can be advanced by maintaining that process. But beyond this the relationship does not go. The bargainers have no enduring purpose that holds them together.
Transactional leadership is characterized by two primary factors: contingent rewards and management-by-exception. Contingent reward concerns the rewards that are granted in recognition of effort and good performance. Management-by-exception maintains the status quo, intervening only when subordinates do not meet acceptable performance levels or when corrective action is required to improve performance.
Political scholar James MacGregor Burns first developed his typology of leadership in his 1978 book Leadership. He built on the work of German sociologist Max Weber's rational-legal model of authority in the context of organizational theory, conceptualizing leadership as a power-imbalanced social contract between leaders and subordinates, each of whom has specific goals that may be shared or unrelated.
Burns specifically defined and contrasted two dominant types of leadership style: transactional and transformational. He distinguished between the two by explaining that:
The object in [transactional leadership] is...
Official source
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