Transactional and Transformational Leadership
The current one of the most popular leadership theories ''transformational leadership'' seems beeter than transactional leadership in nature since it stresses the intrinsic motivation not extrinsic motivation such as exchanging rewards.
Transactional leadership doesn't focus on individual needs and personal development, transactional leaders trade things with followers to get expected outcomes. Two major factors are contigent rewards and management-by-exception. Contingent rewards refers to leaders exchange specified rewards that followers want in order to get efforts of followers. Management-by-exception refers to leaders use both active and passive forms to watch followers closely for mistakes and rule broken, and intervene followers when they failed to met the standards. Both active and passive involve negative feedback amd reinforcement, which often create fear climate and culture in organization, so the leaders can only exachnge rewards to followers to get expected outcomes without surprise.
In the other hand, transformational leadership focuses on creating a vision which shared by individual's needs in organization, leaders involve themselves in the culture and they engage and motivated followers to get greater outcomes. The leadership book introduced some Taiwanese companies perform transformational leadership theory and related to organizational innovation which is not surprising since once leaders create free environment for discussion, followers will feel more engaged and inspire new thinking and things that may be more innovative than expected.