Final answer:
The leadership style based on the exchange of services for rewards or punishments is transactional leadership. It focuses on the manager-employee exchanges and is juxtaposed with transformational leadership, which seeks to inspire and change the organization.
Step-by-step explanation:
The type of leadership that is based on an exchange of services between the manager and his or her employees is called transactional leadership. This leadership style is characterized by a focus on supervision, organizational goals, and a system of rewards and punishments. Transactional leaders maintain the status quo and often take on the role of managers. They differentiate from transformational leaders who are seen as charismatic role models, inspirational, intellectually stimulating, and considerate, striving to bring about change within an organization.
As opposed to other leadership styles such as democratic, laissez-faire, and autocratic leadership, transactional leadership specifically operates on the principle of transactions - that is, clear exchanges whereby performance is directly linked to rewards and failure to adhere to set goals is met with punishments.
When referring to styles of leadership that involve a communication pattern that flows from the top down, authoritarian leadership best fits this description. Moreover, the concept of socialized charismatic leadership represents a style that is egalitarian and serves the collective interest, empowering others and contrasting sharply with the personalized, often narcissistic style of some autocratic leaders.