Transformational leadership theory is very similar, almost identical, to charismatic leadership. The two are interchangeable. In both approaches, the basic assumption is that people are followers, and require extrinsic motivation to get a job done. A charismatic leader stresses team goals, the importance of the task and the potential of his followers to rise above self-interest. Transformational leadership uses the charismatic qualities of the leader, usually working alone, to alter the perception of the followers to see the task --- or the organisation --- in a new light.
Transformational leadership depends entirely on the charismatic qualities of the leader. Such leaders do not share power, and vehemently reject any sense of challenge or question. The transformational leader wants to change those in his charge: he wants to instil new motives in them, making them better workers and employees. The organisation and its mission is articulated in idealised terms, and it is this radical idealism that provides the motivation. Such a leader seeks to alter the nature of the reality around the employee. Such power knows no intrinsic limits.
Charismatic leaders seeking transformation are inherently manipulative. Plato writes in his famous "Gorgias" that this was the motive of the sophists of his day in ancient Greece. The sophists were capable of making any side of an argument seem plausible through the use of manipulate imagery and the poetic use of words. It is the passions, not reason, that these people seek to provoke. At their worst, transformative sophists seek to suppress reason and access only the passion and enthusiasm of their charges. Such people want followers, not thinkers.
Transformational leaders are all about motivation and self-promotion. One of the most problematic aspects of transformational or charismatic leadership theory is what it does to the leader. Under extreme conditions, such a leader can slip into malignant and pathological narcissism as her power increases over the organisation. She can come to believe she is incapable of wrongdoing. All is permissible in the interest of the firm, organisation or project.
These kinds of leaders do not care about details. They cannot be involved in the actual, day-to-day execution of a project when their purpose is to motivate and change. In theory, a transformative leader might be totally ignorant about the nature of the task, and know only about the organisation in general terms. The problem Plato had with these people is that this limited knowledge is all that is necessary. Such leaders can simply fall back on stock phrases and rhetorical weapons to give the sense of a superhuman or historically significant undertaking, and their job is done. The transformational leader, at his worst, is a combination of a cult leader and a politician. Rhetoric dominates substance, passion dominates reason and docility dominates critical thinking.