The transactional leadership theory started in the mid-20th century by Max Weber, the German sociologist and economist who did a great deal of work on bureaucracy. Transactional leaders respect authority and structure, managing people within a set framework within an organization they adhere to. Today it is largely contrasted with transformational theory, which is seen as a more proactive, less punitive style of management.

One strength of it is promoting performance via rewards, which is a positive trait of transactional leadership because it recognizes good effort and performance and can positively reinforce the good behavior.

A second strength is that transactional leadership is effective to help retain the status quo. Bass and Avolio partially describe transactional leadership as “leadership that supports the status  quo  through  mutual  leader  and follower self-interests across three dimensions: contingent  reward,  active  management-by-exception, and  passive  management-by-exception.” While status quo maintenance may not always be a positive trait for a company, in times when the existing state of affairs is in a positive state, the ability to continue that harmony is seen as a benefit.

A third strength is the standardization of expectations for all employees. If a rather rigid set of standards have been culturally and organizationally established by the leader, employees know what is expected and know that if they do not perform up to a certain level there will be a set of escalating consequences administered.