Transactional leadership theory received most of the attention in empirical studies involving leadership prior to the latter part of the 1970s. The origins of transactional leadership theory are very similar to those of transformational leadership; however, transactional leadership originated as a result of early leadership theories involving an exchange between the leader and follower. Transactional leadership is incentive based and depends on the position power of the leader. When the follower, or subordinate, does what is expected and performs as directed, he or she is rewarded by the leader in some way. Such a reward is often, but not always, material in nature. If the follower fails, there may be some form of punishment.
Transactional Leadership: Is it ethical? Why or why not?