Transactional leadership takes the approach that leaders engage in a bargaining relationship with their followers.

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Transactional leadership is based on a transaction or exchange between leaders and followers. This approach focuses on the use of rewards and punishments to motivate followers and achieve goals. The leader sets clear expectations and goals and rewards followers for meeting these expectations while punishing them for failing to do so. This approach views leadership as a mutually beneficial transaction between leaders and followers.

Transactional Leadership Takes the Approach That Leaders Engage in a Bargaining