Burns (1978) thought of transformational and transactional leadership as opposed to one another. Bass (1985) was one of the first to introduce the notion that leaders could exhibit both transformational and transactional behaviors. In fact, Full Range Leadership dimensions should be regarded as belonging to a continuum rather than to separable behaviors. Transformational and transactional leadership are related to such an extent that it is often difficult to discern their effects (Judge & Piccolo, 2004). Transactional leadership reflects its position as a precondition for transformational leadership, and ideal leaders exhibit a composition of both transactional and transformational leadership (Furtner & Baldegger, 2013).
Bass and Avolio (1994) claim that in addition to the effects of transactional leadership, transformational leadership explains an additional positive variance of subordinates’ performance known as augmentation effect. Followers are more motivated to accomplish targets and even go the extra mile to achieve them, and they perceive higher satisfaction (Bass, 1995). Yet, contradictory results expose the augmentation effect to criticism. Wang, Tsui and Xin (2011b) could not confirm effects of the augmentation hypothesis. A recent study by Birasnav (2014), however, found that transformational leadership is positively linked to organizational performance even after controlling for effects of transactional leadership. The study also supported assumptions that transformational leadership is positively associated with knowledge management procedures beyond the effects of transactional leadership.