Theory and practice of transactional leadership have demonstrated the necessity of transaction in business as well as in daily life. The concept of transactional leadership was initially described by Max Weber - one of the founders of modern sociology in 1947. He has developed three ideal types of leaders: Bureaucratic, traditional, charismatic, in which the idea of bureaucracy defined as "the exercise of control on the basis of knowledge” (Weber, 1947) was the premise for transactional leadership theory later. He believed that transactional leader is effective in using knowledge or legal authority to achieve goals. Bernard Bass, using Weber basic of a bureaucratic leader, developed the characteristics of the exchanges occurred between leaders and followers (Bass, 1990) to build a “win-win” situation, named transactional leadership. Hartog, Van Muijen & Koopman (1997) argued that the leaders – follower relationship not only involves exchanges, but rather than bargaining.
Characteristics
Transactional leadership works through process of motivating and directing followers to achieve goals by reward and punishment system which are contingent upon the performance of the followers. If subordinates perform well, they receive some kind of reward will follow, and if performance is poor, a punishment will follow. As a result, policy, procedures and standards are necessary and important factor in transactional leadership to achieve routine performance goals. Leaders in a business