James MacGregor Burns (1978) helped rekindle trait theory by arguing that only a person with a unique set of attributes can drive significant change in organizations and society. Some writers use words like “emerging,” “recent,” and “contemporary” to introduce transformational and transactional leadership theories; however, they seem to be variations on the task-relations dimensions of early trait theories. The difference is that research has positively associated these remnants of trait theory with employee behaviors that represent good leadership (Kreitner & Kinicki, 2008). Transactional leadership is like classic descriptions of task-oriented leadership in that the leader organizes tasks and people to accomplish goals and influences subordinates to achieve expected performance levels.

The dimensions of transactional leadership (Burns, 1978) include contingent rewards, active management by exception, passive management by exception, and laissez-faire management. The leader uses contingent rewards to provide subordinates with the rewards and exchange associated with accomplishing mutual goals. This leader uses management by exception to monitor and control follower behavior within rules and standards. The leader who uses passive management by exception gets involved only when a subordinate is not meeting standards. The leader who uses laissez-faire management abdicates responsibility and decisions to subordinates.

Transformational leadership (Burns, 1978) is like relationship-oriented leadership. It involves influencing significant changes in people to put aside self-interest to commit toward organizational goals or work for others. Transformational leaders can lead significant change by gaining strong follower commitment to their vision, effectively using problem-solving techniques to determine actions, securing the resources necessary for accomplishing the vision, building an environment that encourages creativity, courage, and risk-taking, aligning the culture and infrastructure with the vision to sustain the momentum of transformation, and fostering collective persistence toward the vision.

Dimensions of transformational leadership (Burns, 1978) include charisma, inspiration, intellectual stimulation, and individualized consideration. The leader who uses charisma provides a sense of mission and can get subordinates to feel pride about being in the group while gaining respect and trust for others in the group. They passionately communicate a future idealistic organization and use visionary explanations to depict what employees can accomplish. Followers gain emotional attachments to and idolize the transformational leader.

The leader who uses inspiration passionately communicates high expectations, uses symbols to focus collective efforts, and simplifies purpose. The passionate leader motivates subordinates to work toward the goals of the leader. The leader who uses intellectual incentive promotes aptitude and prudence and engages followers in methodical problem-solving. The followers of the intellectual leader feel encouraged to think creatively, take risks, and solve problems.

The leader who uses individualized consideration gives personal attention to individual followers, coaching and advising them toward organizational goals. The leader's followers who use individualized consideration feel valued as individuals and perceive that the leader is helping them develop individually and as a group. Transformational leadership can exist throughout an organization, but it is most necessary at the executive levels that can craft and communicate the vision.

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