Which statement best contrasts transformational and transactional leadership in the context of change management?

• A. Transformational leadership emphasizes day-to-day compliance; transactional leadership emphasizes broad vision.
• B. Transformational leadership is best for preserving the status quo; transactional leadership fosters innovation.
• C. Transformational leadership focuses on developing people and vision, while transactional leadership relies on rewards and punishments.
• D. Transformational leadership ignores follower development.

Answer: (C)

In change management, the key contrast is how leaders motivate and develop followers. Transformational leadership aims to develop people and create a compelling vision for change, inspiring commitment and encouraging growth so individuals want to pursue new directions beyond their self-interest. It builds trust, fosters innovation, and empowers others to contribute to the change effort. Transactional leadership, by contrast, relies on rewards and punishments to achieve compliance with established processes and goals, focusing on performance, standards, and monitoring rather than inspiring deep buy-in or growth. Because of this, the description that states transformational leadership centers on developing people and vision while transactional leadership relies on rewards and punishments best captures the essential difference in how each approach supports or drives change.