Transactional and Transformational Leadership Theories

Many types of management can be used by people in the position of power in various settings. Transactional leadership is an approach based on certain exchanges taking place between leaders and their subordinates. According to Northouse (2018), this model is dependent on a reward for following a set agreement and negative reinforcement for failure to abide by that contract. The theory is primarily descriptive and does not discuss subordinates’ needs and the stakeholders’ personal development (Northouse, 2018). The model’s main benefits are that the relationship between managers and employees is clearly defined, followers know what is expected of them, and are productive as a result.

Transformational leadership relies on establishing a connection between managers and their followers. The model’s main components are individualized consideration and influence on the subordinates and inspirational motivation (Northouse, 2018). The transformational theory is well researched, considers the needs of the followers, and effectively achieves set goals and objectives (Northouse, 2018). However, this model also overidealizes leaders, ascribes organizational achievements solely to them and not the employees, and describes the style as a personal trait.

Authentic leadership is an umbrella term that defines a complex relationship between the leader and their followers. Authentic managers are self-aware, objective, open and honest, and have a set of moral values (Northouse, 2018). This theory’s strengths are that it provides guidelines for becoming an authentic leader, underlines the importance of doing what is morally right for society, and emphasizes the need to understand and appreciate other people’s values (Northouse, 2018). However, the theory is underdeveloped, does not explain how moral values can be applied in practical situations, and its effectiveness is unclear.

Overall, there are several theories and approaches for understanding leadership behavior in organizational settings. The transactional theory describes the relationship between leaders and their subordinates as a reward and punishment system but fails to consider employees’ needs. The transformational approach takes those needs into account but tends to overidealize persons in charge and their impact on the subordinates. Finally, although its effectiveness is unclear, the authentic model discusses leaders’ traits and how they can be developed.


Northouse, P. G. (2018). Leadership: Theory and practice (8th ed.). SAGE Publications.

Find out your order's cost