A. Transactional Leaders
• Leaders who guide or motivate their followers in the direction of established goals by clarifying role
and task requirements.
• Characteristics of Transactional Leaders
❧ Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good
performance, recognizes accomplishments.
❧ Management by Exception (active): Watches and searches for deviations from rules and
standards, takes corrective action.
❧ Management by Exception (passive): Intervenes only if standards are not met.
❧ Laissez-Faire: Abdicates responsibilities, avoids making decisions.
• These kinds of leaders guide or motivate their followers in the direction of established goals by
clarifying role and task requirements.
B. Transformational Leaders
• Leaders who provide individualized consideration and intellectual stimulation, and who possess
charisma.
• Characteristics of Transformational Leaders
❧ Charisma: Provides vision and sense of mission, instills pride, gains respect and trust.
❧ Inspiration: Communicates high expectations, uses symbols to focus efforts, expresses important
purposes in simple ways.
❧ Intellectual Stimulation: Promotes intelligence, rationality, and careful problem solving.
❧ Individualized Consideration: Gives personal attention, treats each employee individually,
coaches, advises.
• Transformational leaders inspire followers to transcend their own self-interests for the good of the
organization.
• They change followers’ awareness of issues by helping them to look at old problems in new ways;
and they are able to excite, arouse, and inspire followers to put out extra effort to achieve group
goals.

• Transformational leadership is built on top of transactional leadership—it produces levels of follower
effort and performance that go beyond what would occur with a transactional approach alone.
• Evidence indicates that transformational leadership is more strongly correlated with lower turnover
rates, higher productivity, and higher employee satisfaction.


b

A. Selection
• The entire process that organizations go through to fill management positions is essentially an
exercise in trying to identify individuals who will be effective leaders.
Items of consideration during selection include:
• Reviewing the specific requirements for the position. What knowledge, skills, and abilities are needed
to do the job effectively?
• Testing is useful for identifying and selecting leaders. Personality tests can be used to look for traits
associated with leadership—ambition and energy, desire to lead, honesty and integrity, selfconfidence, intelligence, and job-relevant knowledge.
• Testing to find a leadership-candidate’s score on self-monitoring. High self-monitors are likely to
outperform their low-scoring counterparts because the former is better at reading situations and
adjusting his or her behavior.
• Assess candidates for emotional intelligence. High EI should have an advantage, especially in
situations requiring transformational leadership.
• Interviews provide an opportunity to evaluate leadership candidates.
B. Training
• People are not equally trainable. Leadership training is likely to be more successful with individuals
who are high self-monitors than with low self-monitors.
• It may be optimistic to believe that we can teach “vision-creation,” but we can train people to develop
“an understanding about content themes critical to effective visions.”
• We also can teach skills such as trust building, mentoring, and situational-analysis skills.
• There is evidence suggesting that behavioral training through modeling exercises can increase an
individual’s ability to exhibit charismatic leadership qualities.