You are part of the top-management team at Ambrosia Greeting Cards, Inc. In a strategic planning ...

Transformational leadership occurs when leaders are able to (1) increase subordinates' awareness of the importance of their tasks and of performing them at high levels; (2) make employees aware of their needs for personal growth, development, and accomplishment; and (3) motivate employees to work for the good of the organization rather than for purely self-interest.

Transformational leadership has an impact on subordinates through charismatic leaders that provide a vision, clearly communicate this vision (gather enthusiasm), intellectually stimulate employees, and show developmental consideration for employees.

Transactional leadership is based on a leader's exchanging rewards for good performance and punishment for substandard performance. Although transformational leaders often use these transactional techniques, they do not typically rely on them to inspire and motivate people to adopt the vision of the leader or organization. This limits the outcomes available to transactional leaders.