ing and scanning the environment, coaching people working under him, making regular input in the work of subordinates, and managing activities (Hackman & Wageman, 2005).
Transactional theory argues that a leader should have power and formal position which is used to control, reward, and punish employees. Leadership is seen as a give and take between leader and his subordinates.
This theory calls for a leader to make sure that employees are motivated enough to perform at their highest potential. Transformational theory is focused more on understanding employees and treating them with respect in order to achieve good results. This theory does not see leadership as merely a transaction between two parties but much more than that.
This theory argues that a leader’s job is to make an environment that is feasible for work and in which employees are able to work together like a well oiled machine. A leader works to develop this environment and then the rest is done by employees.
Contingency theory takes on a different view and argues that effective leadership is heavily dependent on factors like environment and technology (Woodward, 1958). A good leader has to evaluate the environment and make decisions accordingly. According to this theory, there is no set outline that a good leader can follow instead he or she has to decide differently on a case by case basis.
The theory that best outlines effective leadership in an organization is the transformational leadership theory. This theory calls for motivating employees and giving them power and independence. This theory gives importance to subordinates and views them as assets. This is why transformational theory of leadership is the best and can help foster effective leadership in an