Video:What is Management Leadership Theory?

Transcript:What is Management Leadership Theory?

Hi, I'm Jen D'Amore for About.com, and this video is all about management leadership theories, what are they?

Management Leadership Theory Rewards System

Management leadership theory, also known as transactional leadership, was first described by sociologist Max Weber, and continued to be explored by Bernard M. Bass. This type of leadership is based on a system of rewards and punishments and is typically used in business, where employees are rewarded when they perform well, and are punished when they fail.

Transactional leadership is based on the assumptions that:

• People perform their best when the chain of command is definite and clear.
• Workers are motivated by rewards and punishments.
• Obeying the instructions and commands of the leader is the primary goal of the followers.
• Subordinates need to be carefully monitored to ensure that expectations are met.

Implementing the Management Leadership Theory

In transactional leadership, the relationship is based on a series of transactions, you give me something and I give you something in return. Transactional leadership works best in situations that are cut and dry, where what is needed and what is exchanged is simple, and clearly-defined, therefore, rules, procedures, and standards are an important part of the system. While this type of leadership is effective in some situations, it is not the kind of leadership that allows subordinates to be creative or reach their full potential.

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