Transactional Analysis

by Len Horridge

What is Transactional Analysis?

Transactional Analysis is a method of analysing how we react and respond to others and, by using the structure of the theory, work out how to get better results or, in some instances, understand why we get the results and responses we receive.

Do not be put off by the name; as the advert says, it does exactly what it says on the tin – it analyses transactions. These are mostly transactions between individuals but, in some cases, the theory can be applied to entire organisations.

A transaction is any two-way communication with another person. This can be a casual hello, a meeting, a long-term relationship or any variation on these. When we interact with others, we are having a transaction and the way we and they behave will dictate our response and the direction of the transaction.

You will have many transactions in a day: buying a tube/bus ticket, ordering a meal, talking on the phone, chatting with your family, playing a sport with others, having business meetings and so on. Anything that involves another human being is a transaction. Most transactions will be fine, but some may leave you less than happy. By using this theory, you may be able to find out why you get these feelings.


The theory was conceived and developed by Dr Eric Berne in the 1950s, in the course of his psychological work investigating why people behave in certain ways in certain relationships. It evolved from the work of other psychologists, notably Freud, Gestalt and Pinfold.

Berne’s book, Games people play, became an instant classic. It has been published in many different languages and has sold regularly since its first imprint in 1964. While the book concentrates very much on one-to-one relationships, and predominantly on marriages, we will look at the uses of Berne’s theory in business, where many psychologists have taken it since.

The theory

The theory of Transactional Analysis can be quite complex, but there are certain basic elements which are simple to grasp and easy to use on a day-to-day basis.

The basis of the theory is that we all have certain ego states and we tend to use one or other of these in given situations (or transactions). We will behave differently according to whether we are with our children, our parents and our workmates, but we will still ostensibly remain us. However, given different situations, we decide, either consciously or subconsciously, to change our behaviour.

This is neither good nor bad; it just depends on what we want from the transaction. The crucial thing is to know the outcome we want and to understand how we get it (or, in many cases, why we don’t get it).

The theory holds that we store certain mental tapes in our subconscious, replaying them at particular times. These tapes relate to the ego state we have at a given moment (and we all have the capacity to act from each of these states). What Berne suggested was that, by having a balance in these tapes – and the ability to choose the appropriate tape to suit the occasion – we will have a balanced view of life and therefore a balanced approach.

The tapes we have inside us are mostly imbedded in our formative years, which Berne highlighted as between four and seven (although this can vary according to many influences). Some of these tapes can help, while some can hinder us, affecting our development and view of the world. Indeed, Berne suggested that these formative years gave us a ‘hint of our own worth in relation to theirs [other people’s]’.