Use of Transactional Theories in Management

“Management is about arranging and telling.

Leadership is about nurturing and enhancing.”

-Tom Peters

Manager and Leader are the most commonly used words but are very rarely defined. By understanding the actual difference in meaning of these terms you can know when to manage and when to lead.

Here Tom Peters says that, the managers are the ones who do the arrangement, like setting objectives. He has to set goals for the group and decide what all they need to do to accomplish the goals. Then he has to divide work into activities and then selecting people. Then he has to tell the group about their work, a team will be formed out of his people through different decisions. Then manager establishes target and yardsticks, and analyses, interprets and appraises performance. With this there will be rise in no. of knowledge workers and in knowledge economy these people are company’s most valuable asset and this task of developing assets is up to the manager.

What is MANAGEMENT? Management is the process of dealing with people in which it involves the achievement of goals and objectives by using the available resources economically and effectively.

According to Harold Koontz, "Management is the art of getting things done through and with people in formally organised groups."

Management include few functions such as:

• Planning: Planning is the function on which the other three functions depend. In this management evaluates where the company lies at the moment in current situation and what it will be in future. Then deciding the correct course of steps to be take attain the goals of the firm and then determining the objectives and implementing them.

• Organising: Organising is the second function. In this it is assured that...

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... Management Theories, also called as Transactional Theories. The theories here focus upon the group performance, organisation and role of supervision. These theories basically follow the rewards to encourage high performance and punishments system. These theories are most commonly used in business firms, on the success of an employee, they are rewarded and at the time failure, punishment is given.

In these theories a clear chain of command in maintained to get the best out of the social system. In this the subordinates do what the manager asks them to do. A clear structure is created, whether it is work requirement or reward structure, everything is made clear. Mostly punishments are not mentioned but they are obvious that is clear. So mainly, the leaders following this type of theory engages others in the opposite activity of exchanging one thing with another.