Sarros and Moors (2001, p. 49) state that transactional
leadership essentially concerns the relationship between the leader and follower. It demonstrates an offer by the leader and
acceptance by the follower to perform at an agreed and accepted level. Transactional leadership has three elements:
Contingent Reward is when a leader sets goals and direction
and his/her ollowers receives something in exchange. For example, the follower may be rewarded in monetary terms, promotion,
praise or recognition for the leader obtaining agreed performance (sourced from http://changingminds.org/disciplines/leadership/styles/transactional_leadership.htm). A contingent reward actually increases benefits to the leader from his/her followers, such as
extra effort and better performance. In addition, it also determines “path-goal theory”, ie leaders give their
followers the path to success and it is up to the followers how much effort they put into it. It is suggested that an important
aspect of contingent rewards is negotiation between the two parties and when this has occurred, has been found to be even
more beneficial (Densten, 2006, p. 38).
Management-by-Exception - “active” is when a leader continually
monitors his/her followers and intervenes when necessary, such as problems. This may be perceived as interfering or controlling,
however, it is part of most organisations today and integral to success (Garman, Davis-Lenane & Corrigan, 2003, p. 803).
Walumbwa, Wu and Ojode (2004, p. 124) state that active management-by-exception is positive management as it eliminates further
repercussions of failure. The authors believe that leaders in the 21st century should not use this style of leadership
as it portrays that of a manager rather than a leader and when used, normally takes on a negative form (Harland, Harrison,
Jones & Reiter-Palmon, 2005, p. 2).
Management-by-Exception - “passive” is when a leader gives trust to the follower and only intervenes when advised
of a serious problem. Harland et al (2005, p. 2) are of the opinion that this is a failure in managing people to their potential
in addition to obtaining the best from their allocated tasks and can be perceived as avoidance. The authors believe that passive
management-by-exception can be construed as inexperience, lack of confidence and foresight in leaders and Ohman (2000, p.
32B) is of the same opinion.