Both transformational leadership and leader-member exchange theories have been the subject of discussion for many scholars. Most authors agree that transformational leaders “have qualitatively different and quantitatively greater effects on their followers than the effects of exchange leaders” (Gupta & Krishnan 2004, p.7). This essay builds on the existing literature on these two theories and will attempt to draw a parallel between LMX and transformational leadership, that is, it will reveal the different and similar qualities of supervisor-subordinate relationships. Specifically, the essay focuses on the mechanism that each leadership style uses in developing these relationships. This will actually help to discover some differences and similarities. This article initially revisits the main aspects of transformational leadership and LMX leadership theories and then discusses them in relation to their ability to develop different qualities of supervisor-subordinate relationships. In “Leader-Member Exchange, Transformational Leadership, and Value System” Krishnan (2005 ) noted that according to Burns, “the outcome of transformational leadership is a relationship of mutual stimulation and elevation that converts followers into leaders and converts leaders into moral agents,” which means that both leaders and team members offer each other. In this case, leaders serve their followers, create conditions for their further development and make them feel free and independent in their work. Burns also stated that “leaders and followers lift each other to higher levels of morality and motivation,” meaning that transformational leadership is possible because both team members and leaders become better and improve each other ( Gupta & Krishnan 2004, p. 14). Bass further expanded the theory proposed by Burns and introduced it into the organizational context. He defined transformational leaders as leaders who motivate their followers to do more than they initially expected to do. Transformational leaders are attentive to the needs of team members; however, it takes time to develop strong emotional bonds with each other. However, leaders always encourage their followers to do their best. Leaders help people look beyond their own self-interest for the good of the entire group, organization, or society. They also help followers understand the need for emotional and intellectual change; striving for greatness that lies in the aspiration of corporate effectiveness “such as profits and high stock value, as well as impeccable ethics” (Dubrin et al 2006, p. 107). Thanks to leaders, team members know the goals and ways to achieve them. According to Bass's (2003) conceptualization, transformational leadership consists of charisma, intellectual stimulation, inspirational motivation, and individualized consideration.