The term transformational was first coined by J.V Downton in 1973 (Downton, 1973). However, significant insight of transformational leadership was added by James Burn in 1978 through his publication, Leadership (Burns, 1978).  The transformational model was expanded by Bass as his theory gave rise to a transformational continuum with three modes namely transformational, transactional and laissez-faire leadership (Bass, 1985).  Later as the scope of the study of expanded, a second dimension within transformational leadership was identified known as pseudo-transformational leadership.
Managers as leaders are often responsible for changing the status quo by hauling it in a certain direction, be it for innovation and growth or any other unknown motive.  In an organization lower level managers and front-line staff simply follow the direction provided by leaders.  The direction is sometimes led by conceited self-interested individuals who often are confused as transformational leaders.  In actual, self-interested individulas are pseudo-transformational leaders who focus mainly on their own interests and aims rather than that of the whole group (Northouse, 2010).
In contrast, a transformational leader is the one who has the ability to influence and inspire individuals.  By frequently adopting a charismatic and visionary leadership style, transformational leaders not only motivate but also change and transform people in a positive way.  Transformational leaders have a vision which inspires others to follow.  With the help of motivation and inspiration followers not only accomplish stated goals but also surpass what is expected of them (Northouse, 2010).  The core characteristics of transformational leader revolve around values, ethics, emotions and long term goals.  Transformational leadership incorporates an encompassing approach, it is a dyadic process which closely binds the leader and followers and both parties bring a higher level of motivation to one another.
In the business world, Managers often play the role of pseudo-transformational leaders, exploiting lower level staff by giving importance to their own interests while neglecting the well-being of their subordinates.  A common example of it is managers accrediting themselves in front of the senior management by stealing the effort of a subordinate without even mentioning his/her name.  Such a deed is highly unethical and kills the motivation of employees to perform better.  However, the same managers may act as transformational leaders if they positively influence their subordinates.  They can encourage and motivate the employees and help them to enhance their skills and talent by recognizing and awarding them for their hard work.

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