zie, & Bommer, 1996).
Transactional leadership "pursues a cost-benefit, economic exchange to meet subordinates' current material and psychic needs, in return for contracted services rendered by the subordinates" (Yukl, 1994, p. 14). Transactional leaders motivate subordinates through the application of two concepts·contingent reward and management-by-exception. Contingent reward is a process in which the leader contracts with the subordinate by providing rewards for a mutually agreed upon effort (Pfeffer, 1998). The leader and subordinate agree upon what the follower needs to do to be rewarded or to avoid punishment. Subordinates are given a clear understanding of what is expected of them. When the management-by-exception is applied, the leader intervenes in the activities of subordinates only if specified standards are not met or when something unexpectedly goes awry (Lincoln & Kalleberg, 1995). Management-by-exception can be either active (watching and searching for deviations from rules and standards to take corrective action) or passive (intervening only if standards are not met).
Comparing of Styles of Organizational Leadership
The transformational-transactional leadership paradigm is but one model for the differentiation of leadership styles. Other differential models include the relations oriented-task oriented leadership model, the consideration-initiating structure, the directive-participative leadership model, and the autocratic-democratic leadership model (Quinn, 1988).
Bernard Bass (1990) contended that the transactional-transformational model is a new paradigm, neither replacing nor explained by other models of leadership. Other writers describe concepts similar to transformational leadership as charismatic, inspirational, or visionary leadership. There are more similarities than differences among these several conceptions of leadership. Alan Bryman (1992) refers collectively to all of these concepts...