Leadership, the process by which leader motivate followers to perform well is a critical element in ensuring the sustainability of an organization.

Effective leadership always plays an important role in the growth and better performance of the organization Research in the field of leadership has never saturated with theoretical and conceptual quests for leadership styles that work with any situation and followers condition. Regardless of the type of organization, leadership is discerned to play a vital role in establishing high performing teams. Therefore, the purpose of this essay is to investigate what certain leadership styles bring benefits to their followers and organization? Which is the best leadership styles should be used in organizations? Over the past two decades, leadership mainly focuses on the two main styles of leadership i.e. transactional and transformational leadership Transactional leadership is grounded by an exchange relationship and refers to a situation where leaders provide rewards to followers who achieve good performance and, on the contrary put on punishment to those who are not. Transformational leadership, on the other hand transforms followers to rise above their self-interest by altering their morale, ideas, interest and values motivating them to perform better than initially expected. (Bass, 1985). Thus, while rules and regulations dominate the transactional organization, adaptability forms the important characteristics stressed that transformational leadership is strengthened by accrued benefits while transactional leadership is solely based on the economics exchange. (Bass, 1997) Many researches had been conducted to define and examined the dimensions of transformational and transactional leadership in organizations. One of the research is attempted to examine the effects of leadership style on the organization commitment and job satisfaction of customer contact personnel in two services. The subjects were 77 branch managers from three regional banking organizations and 47 store managers from one national food chain. Emery and Barker (2007) found that transformational leadership are more highly correlated with job satisfaction and organizational commitment with the factors of charisma, intellectual stimulation, and individual consideration than the transactional factors of contingency reward and management-byexception. These findings seem to support Basss (1985) model that suggests that

transformational leadership is more predictive of individual and group performance and the use of managing-by-exception is not effective leadership style. Leaders help followers to engage in creativity by creating situational context and conditions. Jung (2001) indicated that transformational leadership promoted higher levels of creativity measured by divergent thinking among group member. According to Sosik, Kahai and Avolio (1998), intellectual stimulation is a key characteristic of transformational leadership which is likely to promote creativity by encouraging followers to look at problems from a different perspective. Transformational leaders stimulate their followers to think about old problems in new ways (Bass, 1985; Hater & Bass, 1988). Followers are encouraged to question their own values, traditions, and beliefs, as well as the leaders beliefs and assumptions. For example, when a group of subordinates engages in a brainstorming task to generate innovative and creative approaches to solve their problems, the transformational leaders show how to perform their task and in return followers want to emulate leader behavior for higher levels of performance, thus enhancing creativity in groups (Diehl and Stroebe, 1991). In contrast, transactional leadership tends to provide rewards to followers who achieve good performance (Bass, 1985). Thus, followers are not expected to go beyond their initial expectations nor are they motivated to try out creative solutions There are no active and intentional efforts made by the transactional leader to enhance followers creativity. Followers are perform based on a pre assigned standard, which may hold creativity at the minimal level (Amabile, 1998) The effectiveness of transformational and transactional leadership style in the domain of German nonprofits orchestra was examined by Rowold and Rohmann (2009). They identified and contacted thirty randomly sampled nonprofit orchestra located in a variety of cities in Germany. A high level of satisfaction among members is especially important in nonprofit organization such as recreational orchestra. The research shows that transformational leaders foster performance, partially because they prevent negative emotions on their followers side. Preventing negative emotions seems to be crucial, especially in nonprofit organizations where members are free to join or leave. Transformational leadership also was positively related to positive emotions because

leaders induce joy, pride, admiration, and enthusiasm in the followers. This research also shows that, transactional leadership was positively related to positive emotions. The simple lower-order (contingent reward) relationship and conductor active search for error and mistakes (active management by exception) yielded positive emotions on the followers side. The impact of transformational and transactional leadership style on job success and career satisfaction from various private organizations working in Pakistan has been examined. The study by Riaz and Haider (2010) shows that employees perceive supervisors are more appearing as transactional leadership style as compared to transformational leadership style. They also found that in the private sector, transactional leadership style positively and significantly related to job success as compared to transformational leadership style, which pertains to the provision of either positive rewards in case of meeting established goals or negative rewards when the performer fails to achieve the desired objective. This builds a strong relationship with concrete success in terms of career growth, compensation and supervisors satisfaction. The analysis further gives the positive and relatively higher value of transformational leadership style which reveals that partial or full transformational leadership approach has also been applied, which is about a visionary manager with cohesive group norms and establishing innovative thinking within group. Study by Lowe, Kroeck and Sivasubramaniam (1996) found that transformational leadership was associated more strongly with subjective performance indicators in public organization (for example, government agencies). Transactional and transformational leadership styles provided varying results in different scenarios. In some situation, transformational leadership style was found significantly affecting predicting variable and in some cases transactional leadership style. The best course of action or leadership style is required in accordance with the situational variable. Additionally, Bass and Avolio (1994) argued that although the transformational and transactional leadership are different paradigms, they are not mutually exclusive. As concluded, both leadership styles have given positive result if a match exists between leadership style and situation or environment.