The main traits of the transactional type of leadership, apart from being task oriented, is that transactional leaders are those that guide or motivate their followers in the direction of established goals by clarifying role and task requirements, recognize needs and wants, and see how they will be satisfied. This type of leadership is based on the exchange and mutual benefit and is aimed at improving the efficacy and efficiency of the organization or business unit, while the vision tends to be taken-for-granted.
Transactional leadership is also directed towards contingent rewards through contracts that exchange rewards for effort, promise rewards for good performance and recognize accomplishments. The management by exception can be “active“, when the leader proactively watches and searches for deviations from rules and standards and takes correct action, or “passive“, when the leader intervenes only if standards are not met. Overall, transactional leadership can also be characterized by a “laissez-faire” approach