The transactional leader works through creating clear structures whereby it is clear what is required of their subordinates, and the rewards that they get for following orders. Transactional leadership, also known as managerial leadership, is a leadership style where the executive relies on rewards and punishments to achieve optimal job performance from his or her subordinates. The transactional leadership style was widely used after World War II in the United States.

Many people have trouble understanding the difference between transactional and transaformational leadership.

Political scientist James McGregor Burns was one of the most prominent authors to advance Weber’s theories.

When subordinates perform well, they receive a reward. What’s so interesting about transactional leadership is that this type of leadership typically only works in environments where a certain hierarchy is already set up. How Transactional Leadership Works . In transactional leadership, rewards and punishments are contingent upon the performance of the followers. Punishments are not always mentioned, but they are also well-understood and formal systems of discipline are usually in place. Style. In short, most people are not inherently transactional leaders, they form to this leadership style after … On the other hand, Transformational Leadership is a type of leadership which becomes a reason for the transformation (change) in the subordinates. The leader views the relationship between managers and subordinates as an exchange – you give me something for something in return. This was a time when the government concentrated on rebuilding and required a high level of structure to maintain national stability. In this style, the leader works with the subordinates to ascertain the desired change in the organization.