This document discusses contemporary theories of leadership in organizations, focusing on transactional and transformational leadership. Transactional leadership involves exchanging rewards for work and loyalty, while transformational leadership engages followers around higher intrinsic needs and new ways to achieve outcomes. The key differences are that transactional leadership is responsive and works within existing culture using rewards/punishments, while transformational leadership is proactive, changes culture, and motivates through ideals and group interests.

1. CONTEMPORARY THEORIES
 To overcome the limitations of traditional leadership
 Most current approaches of leadership in organisations are
☺ Transactional leadership
☺ Transformational leadership

2. Transactional leadership
Transactional leader are leaders who exchange tangible rewards for the
work and loyalty of followers.
Ohio state studies, fielders model, path goal theory- transactional in nature
CHARACTERISTICS:
1. CONTINGENT REWARD
2. MANAGEMENT BY EXCEPTION
3. LAISSEZ FAIRE

3. Transformational leadership
 Transformational leaders are leaders who engage with followers, focus on
higher order intrinsic needs, and raise consciousness about the
significance of specific outcomes and new ways in which those outcomes
might be achieved.
Characteristics :
1. Charisma
2. Inspiration
3. Individualised consideration

4. Difference between
Transactional leadership
 Leadership is responsive.
 Works within the organizational
culture.
 Employees achieve objectives
through rewards and punishments set
by leader.
 Motivates followers by appealing to
their own self-interest.
Transformational leadership
 Leadership is proactive.
 Works to change the organizational
culture.
 Employees achieve objectives
through higher ideals &moral values.
 Motivates followers by encouraging
them to put group interests first.