Leadership is a topic rather an institution that has always captivated people who, seek to be leaders themselves and people who research and write about eminent leaders. Leadership and its debate exist since time immemorial from times of ancient Greek and the prolific roman philosophers and writers, to the Machiavelli, to the great modern biographers, all have sketched and written many papers and expressions on the nature of leadership. Contemporary social science analysis of leadership basically started by focusing on what factors contributed and what backgrounds they belong to that is in contexts like military, government, business; that has contributed to them being effective leaders.
Many studies have been conducted of the qualities and characteristics of these people, experts have produced lists of such people, and conclusions are drawn as to what traits people should develop in them in order to be effective leaders. However, these studies have produced inconsistent results.
There are many types and styles of leadership depending on the various works of scholars. Moreover, each style and type of leadership has basic assumptions regarding the behavior of people.
The basic definition of transactional leadership depends on the perceptive of the expert and is rather intuitive in nature. Transactional leadership defines the interaction and relationship between a leader and follower as a transaction or an exchange.
This theory is similar to factor market model in economics. Whereby, a follower only serves and follows the leader's commands because the leader has promised him a reward or incentive in return. This could be an increased salary in an organizational setup or a feeling of accomplishment and worthiness in a school or a volunteer position.
The underlying assumption in case of a transactional leadership is that people are motivated by certain rewards and fear of punishments. This is the basic idea behind an exchange or transaction that will occur between the leader and the follower. Followers will act in a certain manger only if the leader promises a reward or they might want to avoid punishment. Thus there is an exchange that will occur in this type of leadership style.
