Final answer:
The transactional leadership style has ties to social categorization in how managers and employees interact.
Step-by-step explanation:
The contemporary theory of leadership that has ties to social categorization in how managers and employees interact is the transactional leadership style. This style focuses on supervision and organizational goals achieved through rewards and punishments. Managers using this style maintain the status quo and rely on transactions with employees to accomplish tasks. In contrast, transformational leadership style seeks to change the organization and is characterized by leaders who are charismatic, inspirational, intellectually stimulating, and considerate.