For centuries leaders have been analyzed in order to determine what the traits and characteristics of a successful leader are. Leadership, as defined by Koontz and Weihrich (2008) is “the art or a process of influencing people so that they will strive willingly and enthusiastically toward the achievement of group goals” (p. 311). Leadership plays an important role in employee’s participation, creativity, recruitment to an organization, their commitment to the organization, and productivity levels. Over the years, there have been a number of theories surrounding leadership such as the “Great Man” theory, which, according to Riaz and Haider (2010), “assumes that leaders are born and have innate qualities, therefore, leaders cannot be made” (p. 2). Since the early 1970’s and 1980’s, the terms transformational leader and transactional leader have become the mainstream references for the differing types of leadership within corporations. While Transformational Leadership Theory was coined by James Burns in 1978, it was later enhanced in the published writings of Bernard Bass in the late 1980’s (Humphreys, 2002, p. 1).
Transactional versus Transformational
Transactional leaders tend to focus more on delegating tasks to their employees and stepping in when deviations occur while subordinates do as they are told, not because of who told them, but because of the reward of a paycheck or to prevent reprimand (Eeden, Cilliers, and Deventer, 2008). Their authority is formal in that they have subordinates that carry out the work that is told to them. They put their trust in the employees to do the job they were hired for while spending their time determining the path the company should take in the future. A transactional manager may also derive his/her actions from the technique of managing by exception. This technique is based on the premise that the manager’s job is to not oversee the day-to-day tasks of every employee, but to only focus their