Transactional Analysis also is known as the theory of human personality was proposed by Eric Berne in the 1950s. This theory of transactional leadership defines three different ego states in a person who engages in transactions with another person's ego states. These three ego states refer to major parts of an individual's personality and reflect an entire system of thought, feeling, and behavior.
Transactional leadership theory is based on the concept of rewards and punishments. The transactional management approach assumes that the desires of the leader and follower are different and leaders give followers something in exchange for getting something they want. Transactional leaders expect followers to be compliant and focuses on structure, instruction, monitoring, organization, or performance to get tasks completed on time.
Transformational leadership theories focus on the leadership approach where the leader encourages, inspires employees to innovate and create positive and valuable organizational change. A transformational leader works towards “transforming” the culture to one that cultivates trust, mutual admiration, loyalty, and respect with the end goal of developing followers into leaders. Transformational leaders are known to be visionary, inspiring, daring, risk-takers, and thoughtful.
The Vroom-Yetton model is designed to optimize for the current situation the leadership style for best decision-making. Its a decision model formulated with contribution from Arthur Jago on how to make group decisions. The leader must gather information from the team prior to making the decision and involves more people in the decision process.
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