Transformational leadership is a form of influence based on a developmental relationship that elevates others to higher levels of moral and professional development, promotes adaptability and change, and results in performance beyond expectations. Transactional leadership is a form of influence based on an exchange relationship in which the leader provides direction and rewards in exchange for a follower’s delivery of agreed-upon performance. Together, these leadership styles can foster adaptability and responsiveness to changes in markets, broaden collective skill sets for generating more creative solutions to problems, enhance group or team cohesion, collective confidence and performance, and challenge and develop people more fully. Such processes are necessary for productivity and profitability in organizations.

Research on transformational and transactional leadership was originated by James MacGregor Burns as a ...

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