The Mediated Exchange Model In Transactional Leadership

2024 Author: Harry Day | [email protected]. Last modified: 2023-12-17 15:43

This article is devoted to the consideration of the theory of transactional leadership, which is surprisingly poorly sanctified in Russian-language publications. In the article we will consider both the theoretical prerequisites for the creation of this theory, as well as the concept of transactional leadership itself. The purpose of the article is also to supplement and develop the transactional theory of leadership, by introducing a model of mediated exchange into it, explaining the specifics of leadership (in relation to leadership) within the framework of transactional theories.

The theoretical background of transactional leadership theory: behavioral psychology and exchange theories

The theory of transactional leadership is an offshoot of the theories of social exchange, which in turn are a subsection of the socio-behavioral direction in psychology. The beginnings of behavioral ideas explaining social processes can be seen in the works of the classics of behaviorism: I. P. Pavlova, J. Watson, B. F. Skinner, who explained any behavior (and therefore social) through the concept of a conditioned reflex.

Particular attention should be paid to the figure of B. F. Skinner, who introduced the concept of "operant learning" [8]. The latter, in turn, presupposes the formation of a conditioned reflex through reinforcement - encouragement or punishment of a particular behavior. Behavior that is encouraged is more likely to repeat itself when presented with a given stimulus than behavior for which the subject is punished. Moreover, as studies of other representatives of the behavioral direction have shown, it is not any reinforcement that is important, but precisely the one that meets the needs of the subject. Thus, the scientist is trying to explain human behavior and psyche. In particular, in his work [9], he points out how, through reinforcement, such a social function as speech is formed.

Yet another scientist, George Kaspar Homans, was able to completely transfer this teaching to the social sphere. He became one of the founders of one of the behavioral currents in social psychology - the theory of exchange.

The theory of social exchange is a direction that considers the exchange of various social benefits as the basis of social relations, on which various structural formations (power, status, etc.) grow. According to exchange theory, a person's behavior at the moment is determined by his previous experience and the reinforcements he received earlier.

The scientist manages to translate social processes into the language of behaviorism, introducing such concepts as “activity”, “feeling”, “interaction”, “norms”. All of these concepts are viewed through the lens of measurable behavior. Hence, such criteria as the "quantity" of activities and the "costs" of activities. Further J. K. Homans introduces six postulates that determine the social behavior of an individual [7]. The reader can familiarize himself with these postulates corresponding to the literature, but we will try to reveal their essence briefly.

The idea of these postulates boils down to the following: the behavior of an individual will be determined by his expectations from this social interaction. Expectations are determined by previous experience. The individual will choose the type of behavior: which led to reinforcement earlier; the value of reinforcing which is higher than the value of reinforcing alternative types of behavior; the cost of implementing which is less than the value of the expected reinforcement. The value of the reinforcement is reduced when the given reinforcement is received too often (the postulate of satiety). The researcher also points out that in the absence of the expected reinforcement, the individual may experience a state of aggression, which in itself will have a higher value in the future. If the individual receives the expected reinforcement, then he is more likely to be prone to approved types of behavior.

Unlike economic exchange, social exchange is diffuse. This means that the mutual benefits of social exchange have, rather, psychological value (power, status, communication, etc.), economically and legally are not specifically fixed.

D. Thibault and G. Kelly developed the concept of exchange and even tried to put it into practice. They called their theory “outcome interaction theory”. They also view any interaction as an exchange. It is assumed that any social interaction leads to a certain outcome, i.e. rewards and losses of each of the participants in this interaction.

Behavior reinforcement occurs only if the participants in the interaction have positive outcomes, that is, if their rewards exceed losses. Each individual evaluates the possible outcome of the interaction. The value of the outcome of the interaction is determined in comparison with two standards: the level of comparison of an individual (the average value of positive outcomes that he had in the past); the level of comparison of alternatives (the result of comparing the benefits of entering into different relationships).

The main technique for predicting behavior is the outcome matrix [11]. The table contains the entire possible repertoire of the behavior of each participant in the interaction and indicates the costs and rewards. Thus, by compiling a matrix of outcomes and highlighting the most beneficial way of interaction, it is possible to predict the behavior of the individual

Having discussed these authors, we still did not come to the understanding of leadership as a socio-psychological phenomenon. And the theories we have considered are not enough to explain it. Thus, we move on to another author, the sociologist Peter Michael Blau, who took the next step in investigating the problem we are discussing.

Unlike J. K. Homans, who applied his theory in a rather narrow context - the context of interpersonal interaction, P. M. Blau decided to consider the sociological aspects of exchange, and not only in interpersonal relations, but also in various types of social structures [2]. So, he pointed out that in large social structures, exchange is often not direct, but indirect in nature and is regulated, in turn, by factors of normativity and control. However, more importantly for us, he views concepts such as power and coercion through the prism of exchange theories. To clarify these phenomena, he introduces the situation of nonequilibrium exchange (while J. C. Homans in his work considered for the most part equilibrium exchange, in which the amount of rewards and costs are equal for each side of the interaction).

When one of the parties needs something, but cannot offer anything in exchange, there are four possible alternatives: coercion; search for another source of benefits; an attempt to get benefits for free; providing oneself in generalized credit, that is, submission to the other side (as the phenomenon of power manifests itself). If the latter option is implemented purposefully, we are talking about the phenomenon of leadership.

Becoming a leader is determined primarily by group processes. A group is formed because people are attracted to it. They feel that relationships within her are more rewarding than relationships in other groups. To be accepted into this group, potential members of the group must offer its members a reward, proving that they will be able to provide this reward. Relationships with group members will be forged when group members receive the expected reward.

In the early stages of group formation, competition for public recognition serves as a test to identify potential leaders. The latter have great opportunities to reward. Others want the rewards offered by potential leaders, and this usually compensates for their fear of addiction. Ultimately, those with the greatest reward opportunities become leaders.

Within the framework of management and enterprise management, the main implementer of the idea of exchange, whose name is often associated with the concept of transactional leadership, is Douglas McGregor with his theory of "X". Theory "X" is also one of the theories of employee motivation, and assumes that the effective performance of their duties from the employee can be achieved by using the "carrot and stick" method, i.e. rewarding workers for completing the task and punishing for non-fulfillment.

Finally, we turn directly to the theory of transactional leadership, the main representative of which can be considered E. P. Hollander.

Transaction Concept in Transactional Leadership

The transactional approach to understanding leadership, developed by E. Hollander, is based on the understanding of leadership as an exchange relationship between a leader and followers [4]. The essence of these relationships is as follows. The leader provides followers with a number of benefits in the form of: the organization of their actions; clarification of the specifics of the situation; orientation in the direction of application of efforts; attention to people. Thus, by his activity, the leader as a whole contributes to the achievement of group goals. By reciprocating, followers also reward the leader with: recognition; respect; willingness to accept his influence. In short, the leader contributes to the success of the group in solving the problem and ensuring fairness in the relationships of its members in exchange for respect from their side and acceptance of his influence. The result of such an exchange is an increase in the legitimacy of the leadership role, which, in turn, contributes to the strengthening of the leader's influence and the approval of his influence by followers.

E. Hollander and D. Julian [5] identified two characteristics that are relevant to the vast majority of leadership situations: competence in leading group activities; motivation in relation to the group and its tasks. According to the research data of E. Hollander and D. Julian, it is the perception by the followers of the leader's competence in solving the problem and his motivation in relation to the task and interests of the group that determine the growth of his legitimacy and influence.

Idiosyncratic credit

The exchange theory was developed in another concept of transactional leadership - the concept of idiosyncratic credit [6]. The idiosyncratic credit idea aims to explain how a group develops and innovates as a result of a leader's activities in terms of exchange.

E. P. Hollander has moved away from the idea that a leader should be the most vivid personification of the norms of the group of which he is a member. In this case, the leader would only have to play a stabilizing role. In the theory of the author we are considering, leadership, on the contrary, is seen as an innovative and innovative activity. However, for the introduction of certain innovations and for the transition of the group to new stages of development, it is necessary to deviate from the established norms and rules, to show deviant (deviating) behavior, which in a normal situation will not be perceived positively by the group.

However, in order to achieve the goals of the group, the leader still has to go beyond the accepted framework. In this case, the so-called "credit" of trust is granted to him from the side of his followers. This is called idiosyncratic credit. The size of the loan is determined by the merits of this leader in the past, i.e. the group is ready to offer the more credit, the more often the leader's actions in the past were justified, and, on the contrary, the credit will be the less the less often the leader's actions in the past achieved results. Thus, if the leader's actions led to the goal in this case, his credit for the future will be increased. The amount of credit a leader gets from a group also depends on how he or she attains the leadership role - through elections or by appointment.

It is idiosyncratic credit within the framework of the exchange theory that can explain such phenomena as the legitimacy of power and trust in the leader.

LMX (Leader-Member Exchange) concept

Another important concept within exchange and transactional leadership theories is the concept of boundaries and the level of exchange between leader and followers. Representatives of the LMX theory stated that it is impossible to consider the processes of exchange between the leader and the group as a whole, it is necessary to consider the relationship of the leader with each of his subordinates separately [3].

The LMX model divides subordinates into two types:

1. Competent and highly motivated employees who are considered trustworthy by managers (in-group employees)
2. incompetent workers with a reputation for being untrustworthy and unmotivated (out-group employees).

The LMX model also distinguishes two styles of leadership: based on the implementation of formal authority; based on belief. With incompetent subordinates, managers implement the first type of leadership and entrust them with work that is not very responsible and does not require great abilities. In this case, there are practically no personal contacts between the manager and subordinates. With competent subordinates, managers behave like mentors and entrust them with important, responsible work, the performance of which requires certain abilities. A personal relationship that includes support and understanding is established between such subordinates and the manager.

This model tells us about the existence of a "circle" of exchange. The leader is in the center, and the subordinates are at different distances from him. The further the subordinate is from the center of the circle, the less intensive the exchange takes place, the more formal the contacts and the less effective the result of the dyad's activity.

The model of value exchange according to R. L. Krichevsky

The next model that we will consider in the discussion of transactional leadership is the model of value exchange according to R. L. Krichevsky. This model, in turn, can be viewed as a definite response to criticism of transactional leadership from theorists of another direction - transformational leadership. In particular, they often describe transactional leadership as a way to satisfy only the lowest needs of a person. This approach cannot be considered correct, since transactional leadership, as a theoretical construct, involves the exchange of goods aimed at meeting the needs of the individual. In turn, it is not specified that these needs should be exactly the lowest, that is, the theory considers any needs. However, there are other differences between transformational and transactional leadership, which should be discussed separately.

The idea of direct satisfaction of needs, and not a simple exchange of goods within the framework of exchange theories can be found in R. L. Krichevsky. The author points out the importance of evaluating not the objects of exchange themselves, but the value for the individual that they carry in themselves.

“Value is a material or ideal object that is significant for a person, ie. able to satisfy his needs, meet his interests”[12]. The value characteristics actualized by individuals in the course of group activities for the benefit of the entire group, as it were, are exchanged for the authority and recognition of the members of this group, which are also important values.

Value exchange can be carried out at two levels, depending on the degree of development of the group: dyadic (when the group does not yet function as a whole); group (when the group has developed as a systemic formation).

This concludes the review of the main theories of transactional leadership, moving on to discussing the main problems of this area.

Criticism of Transactional Leadership by Representatives of the Transformational Approach

As noted above, transactional leadership is criticized by representatives of the theory of transformational leadership [1]. The latter argue that transformational leadership is about meeting higher-level needs. The main difference between these two directions is most conveniently indicated through an analogy with the concepts of transformation and transaction costs. The former are aimed at transforming an object, the latter at the operations performed with this object, but not related to its production and transformation. Also, theorists of transformational leadership say that transactional leadership is aimed only at exchange and interaction, while transformational leadership involves the transformation of subjects of exchange (their development, the realization of their potential). The latter seems to be more of a marketing ploy, and the criticism itself is seen as inappropriate for a number of reasons.

The main reason is that exchange and transactional leadership theory itself is more general than transformational leadership theories. Based on behavioral psychology, any of our behavior is driven by needs, and the need, in turn, is satisfied with the help of reinforcement, regardless of what level this need is at. Thus, the follower, within the framework of transactional leadership, can receive from the leader both the minimum material reinforcement, which will be sufficient to satisfy his physiological needs, and receive a good friend in the person of the leader, which will satisfy the social needs of the individual. Finally, the leader can provide opportunities for self-realization of the individual, and then he will touch his highest needs. True, it seems that transformational theorists emphasize precisely this ultimate need - self-realization in one sphere or another, rather than the fact that the possibility of self-realization comes from the leader, which, however, does not change the essence.

If we consider transactional leadership on a narrower scale, where "transformationists" point to a leadership process in which, in the case of an exchange, the leader simply reinforces certain actions of the followers, and in the case of transformation, the individual is transformed, that is, his upbringing and learning, then we again stumble upon the above problem. After all, reinforcement is also used as a learning mechanism, and therefore exchange can be used to transform followers.

By the way, E. R. Hollander, calling transformational leadership only a higher form of exchange [4, 18].

However, the concept of transactional leadership does have certain drawbacks, which we will discuss in the conclusions section. But one we will note already now is the excessive generalization of the theory. One aspect of this generalization is that the theory does not provide an answer to the question of what distinguishes a leader - a manager from a leader - a leader. Obviously, they can be distinguished by a different set of issued reinforcements, but this issue itself has not yet been investigated. Within the framework of this article, we would like to highlight this problem.

The differences between the leader and the leader were discussed in detail in another article [10]. Our task in this case is to translate what is written in the article into the language of exchange in order to describe the differences between a leader and a leader within the framework of the transactional approach. For this, we would like to propose a mediated exchange model in transactional leadership.

Mediated exchange model

This model is designed to separate the leader from the leader within the transactional direction, and is inherently very simple. As we found out earlier, one of the main differences between a leader and a leader is the substitutability of the former and the uniqueness of the latter, i.e. the leader cannot be replaced painlessly for the followers [10].

Within the framework of exchange theories, we will consider this distinction through two concepts: "reinforcement" and "means of achieving reinforcement."

In the case of leadership, reinforcement is separated from the means to achieve it. The leader acts as a means of achieving a particular result, a means of satisfying a particular need, but the reinforcement itself does not come from the leader. For example, an individual wants to receive a certain amount of money and he does not care under whose leadership he will receive it.

The best leader will be the one who will provide the least cost the follower incurs in order to satisfy the need. So, the same individual will choose for himself as a leader the person under whose leadership he will be able to achieve this amount with the lowest costs for himself (you can also talk about career opportunities, knowledge, skills, etc.). In leadership, the follower's object of desires is outside the figure of the leader. In this regard, it is the leader that we attribute to transformational leadership, since it presupposes, first of all, the fulfillment of the subordinate's needs, rather than binding him to the leader (although this statement is true only in theory, since many elements of transformational leadership are aimed at forming the charisma of the leader and his image, on which the state of subordinates will depend).

In leadership, reinforcement and the way it is achieved are inseparable from the figure of the leader. For example, an individual admires a given person and wants to work only under his guidance, regardless of how much he will receive. The leader has certain unique characteristics (in the eyes of the follower), for example, the manner of communication, the way of behavior, etc., which evoke positive emotions in the follower, which makes him a leader. Translated into the language of exchange: a leader is an individual with a unique set of reinforcements. Of course, this uniqueness is subjective, it is formed in the perception of followers.

Leader and leader can be combined in one person. Such a person will be both pleasant to talk to and effective in achieving goals. Conversely, a leader's ineffectiveness as a manager will be bad for him and as a leader. This suggests that a number of leadership and managerial characteristics overlap. Also, proceeding from the LMX concept discussed above, and integrating it with the mediated exchange model, we can say that when an individual moves from interaction with the inner circle of influence ("in-group employees") to interaction with a distant circle of influence ("out- group employees "), he simultaneously changes his position, switching from leader to manager. This is largely due to the uniqueness of close personal contacts and the uniformity of formal contacts. And as we remember, the most effective, from the standpoint of the LMX model, are relationships in a close circle of influence, that is, the relationship between a leader and a follower, and not a leader and a subordinate.

conclusions

As a conclusion, it should be said that the concept of transactional leadership, despite its serious scientific validity, has a number of aspects that cause criticism.

1. The theory is too general. The concepts of transaction and exchange are rather abstract, the means of leadership exchange are vague, and their study is more likely left at the mercy of other areas of psychological sciences. Also, the concepts of leadership and power are not clearly separated (not to mention different types of power and leadership styles).
2. The impracticality of the theory follows from the previous point. Exchange is a clear theoretical concept that gives up the slack when it is necessary to give a practical concept of exchange and, moreover, to conduct leadership training. The mechanisms and specific ways of implementing transactional leadership are not entirely clear (more precisely, they are known, but proceeding from other directions - theories of motivation).
3. The theory does not consider all possible learning mechanisms discovered in the behavioral sciences: imitative learning, cognitive learning, etc. But these types of learning are open in the same industry to which the exchange theory belongs.
4. Lack of attention to both the characteristics of the group (which are studied in the framework of situational theories of leadership), and to the characteristics of the leader (which are studied in the framework of the theory of personality traits). Thus, behind the exchange processes in interpersonal communication, an element called "personality" is lost, but many researchers have already pointed out the dependence of leadership processes on this change, as well as on situational variables.

As a result, we can conclude that the transactional leadership theory, although it illuminates a certain component of the leadership process - the interaction of a leader and subordinates - is not able to cover the entire system of group functioning. However, this theory can be effectively integrated with others, both from a theoretical and practical point of view.

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