BUSINESS MANAGEMENTCHAPTER 2

LEADERSHIP:STYLES AND THEORIES

Acc. To Franklin G.Moore,”Leadership is the ability

to make men act the way the leader wants.”

1. Followers2. Personal Ability3. Influencing process4. No need of coercion5. Full capability utilisation6. Ideal conduct7. Leadership is a continuing process8. Leadership is a part of management but

not all of it

Characteristics or Nature of Leadership

9.Leadership is ever a new process10.Leadership is something a person does,

not something he has11.Leadership transforms potential into reality12.Leaders exist because of the need of the

people to follow someone

Peter F.Drucker. ”A business leader is the basic and not easily available source of a business enterprise. The chief factor in the failure of many business enterprises has been inefficient leadership.”

Acc. to Koontz and O’Donnell : Impact of leadership on employees’ utilization of

capability: 1. Social Pressure 2. Need for a job 3.Authority of Superior A) Normal Expectancy:1.Social Pressure2.Need for a job3.Authority of superiorB) Expectancy Through Leaderhship:1.Induced by Leadership.

Importance of leadership

1. Source of Motivation 2.Basis for Cooperation 3.Directing Group Activities 4.Promoting the Spirit of Coordination 5.Facility to the Executives 6.Fulfilling Social Responsibility 7.Basis for Success of Business

1. To define Organisational Goals 2. To divide the Work as per Capability 3. To Guide the Activities 4. To Maintain Discipline 5. To Create Effective Communication 6. To Understand the Feelings if his Subordinates 7. To Secure Cooperation 8. To Represent the Organisation 9. To Make Decisions 10. To Design Environment as per Result

Expectations

Functions of a Leader

1. Ability to Motivate 2. Ability to Communicate 3. Quick Decision-making Power 4. Integrity 5. Full of Courage 6. Self-confidence 7. Flexibility of Mind 8. Ability to Understand the Feelings of Others 9. Sense of Responsibility 10. Tolerance 11. Alertness 12. Technical Ability 13. Psychological Expert 14. Human Ability 15.Physical and Mental Fitness

Qualities of a Leader

I. THE TRAIT THEORY- Bernard and Ordway Teed

Leadership ability is inborn and it cannot be achieved by making any effort

Acc. To Stogdill- 40 qualities divided into 5 partsi. Physical traitsii. Intelligence and ability traitsiii. Personality traitsiv. Task related traitsv. Social traits

THEORIES OF LEADERSHIP

CRITICISM-i. Lack of uniformityii. Ignorance about situationsiii. Unclarity about the degreeiv. Problem of measuring the traits

2. THE SITUATION THEORY- CRITICISM-i. Whether a leader will be successful in all

situations.ii. What qualities required in different

situations

3.THE FOLLOWERS THEORY- CRITICISM-i. Followers alone does not determine the

leadership ability

4.BEHAVIOURAL THEORY-Acc to Ray A Killian- a leader should present

an ideal behaviour before his followers.Factors creating behaviour-a. Level of qualities of a leaderb. Followers’ faithc. Nature of goalsd. Available environment CRITICISM- time an important factor was ignored

5.GROUP APPROACH THEORY- BY Kurt Lewin leader should adopt the norms of the group6.X AND Y THEORY- By Mc Gregor7.PATH GOAL THEORY- based on expectancy

model of motivation.Motivation=valence x expectancy valence= all round development of

employeesExpectancy=preparing the way for the

attainment of the goals

1. MOTIVATIONAL STYLE-i. POSITIVE STYLE- by economic and non economic

incentives.ii. NEGATIVE STYLE-by coercion and fear.2.POWER BASED STYLE-i. AUTOCRATIC STYLE- CHARACTERISTICS:a)Formal relations, b)centralised authority, c)single

man decisions, d)negative motivation, e)wrong belief regarding employees, f)employees’ behaviour, g)only downward communication, h)tight and close supervision and control.

LEADERSHIP STYLES

ADVANTAGES- a)quick and clear decisions, b)satisfactory work, c)necessary for less

educated employees, d)source of motivation for employees.

DISADVANTAGES-a)lack of motivation, b)less productivity, c)agitation by employees, d)possibility of partiality.

ii.DEMOCRATIC STYLE- CHARACTERISTICS: a)cooperative relations,

b)positive motivation,c)belief in employees, d)open communication, e)group decision making, f)cooperative behaviour among employees, g)no need of tight control.

ADVANTAGES: a)high morale, b)creation of more efficiency and productivity, c)peaceful industrial relations, d)quick acceptance of changes, e)availability of sufficient time for constructive work.

DISADVANTAGES- a)requirement of educated subordinates, b)delay in decisions, c)lack of responsibility in managers, d)many types of employees.

iii.FREE-REIN STYLE-CHARACTERISTICS: a)full faith in subordinates,

b)independent decision making system, c)decentralisation of authority, d)cooperative relations, e)motivation through authority, f)two way communication, g)self directed, supervisory and controlled, h)sense of responsibility in employees

ADVANTAGES-1)Devlpt of self confidence in subordinates, 2)high level motivation, 3)helpful in devplt and extension of the enterprise.

DISADVANTAGES-1)difficulty in cooperation, 2)lack of importance of managerial post, 3)suitable only for highly educated employees.

3. RESULT BASED STYLE- I.EMPLOYEE ORIENTED STYLE: human

behaviour is required.*not suitable where employees are careless.

The manager should have be a psychologist.

ii.PRODUCTION ORIENTED STYLE: production more stressed.

*not suitable in the long run.

1. Nature of leader2. Nature of followers3. Size of the organisation4. Situations of work

Determinants of leadership style

A blend of different leadership styles is called continuum of leadership behaviour given by Robert Tannenbaum and Warren H.Schmidt.

Leadership as a continuum

1. A leader take decision and announce it2. A leader tells his decision3. A leader presents ideas and invites questions4. A leader presents a tentative decision subject

to change5. A leader invites ideas before taking a final

decision6. A leader defines the limits within which the

subordinates take decisions7. A leader permits the group to take decision

acc. To the situation.

Rensis Likert- worked at the Michigan University, U.S.A.Included 7 variables in his research-i. Leadershipii. Motivationiii. Communicationiv. Interactive influencev. Decision making processvi. Goal settingvii. Control process

Management system of likert

Four models-i. Exploitative authoritative: system 1ii. Benevolent authoritative:system 2iii. Consultative: system 3iv. Participative: system 4Test of management systems-i. Productivityii. Employees’ turnover rateiii. Employees’absenteeism rateiv. Quality controlv. Wastage of resourcesvi. Wastage of scrap

Allen- poorly motivated people can nullify the soundest organisation.

Motive means the hidden will power in an individual which impels or encourages him to work.

Acc. To Koontz and O’Donnell- To motivate is to induce people people to act in a desired manner.

CHAPTER 3MOTIVATION: nature and theories

Characteristics or nature of motivation-1. Motivation is an internal feeling2. Motivation is a continuous process3. Each person has different motivational

factors4. Motivation may be given in many ways5. It’s an important function of management6. It stimulates people to do work7. It help in securing industrial peace8. It creates morale9. It is the only solution to the problem10. It relates with all levels of organisation11. It relates with human factor of production

Renis Likert- The core of management.1. High level of performance 2. Low employees turnover & absenteeism3. Easy acceptance of organisational changes4. Sweet relations between owner & employees5. Good image of organisation6. Increase in morale7. Proper use of human resources possible8. Helpful in achieving goals9. Builds good relations among employees

Advantages or importance of motivation

Robbins & Coulter- need- satisfying processa. Unsatisfied needb. Tensionc. Drivesd. Search behavioure. Need satisfied f. Reduction of tension

Motivation process

1. Physiological needs2. Safety needs 3. Social needs4. Esteem & status needs5. Self actualisation needs Assumptions- a)people’s behaviour is affected by their

needs, b)there are many needs of people and they can be arranged in an order, c)motivation ends with the satisfaction of needs,d)people move to next need only when the lower need is satisfied.

Criticism-a)the hierarchy of needs is not permanent, b)not necessary that only one need is strong at a time.

Maslow’s need hierarchy theory

A)Maintenance or Hygiene or Dissatisfiers-1.company’s policy & administration 2.technicalInspection 3.mutual personal relation with

inspector 4.mutual relation with other team members 5.salary 6.working conditions 7.personal life 8.security of employment 9.status 10.environment.

B)Motivators or satisfiers- 1.achievement 2.recognition 3.advancement 4.job itself 5.opportunities for growth 6.resposibility

Criticism- the classification is not practical.

Herzberg,s motivation-hygiene theory

Theory X1. Man by nature is sluggish and shirker2. Mostly people are not ambitious and don’t want to take

resposibility3. People want to be directed4. Only physical and security needs motivate5. Strict control,threat and punishment are used to get the

work done.Theory Y1. Man wants to work in favourable conditions2. People are enthusiastic, responsible & full of effort3. People are self directed4. Physical & security needs motivate for short run only

McGregor’s X & Y theory

Features of Japanese Management System-

1) Planning- a)more attention to long term objectives b)subordinates are given importance in decision making c)no hasty decisions are taken d)quick decision implementation.

2) Organizing- a)collective responsibility b)informal organizing c)changes with collective consultation d) internal change agents are used to implement change.

Ouchi’s Z Theory

3) Staffing- a) recruitment through technical institutions b)employment for the whole life c)change of company by the employees is almost non existent d)slow promotion e)long term performance appraisal f)training is considered as long term investment g)arising spirit of dedication amongst employees.

4) Directing- a)a leader is like a helper b) effort to reduce quarrels & creating friendly relations e) face to face communication.

5) Controlling – a) importance to quality b)close control c) collective control

Features of Z theory-1. Involvement of employees2. Establishment of informal organisational structures3. Establishment of trust4. Establishment of strong relation between organisation & employees5. Establishment of coordination among peopleCriticism-1. Lack of reqd efficiency for participation2. Lack of reciprocal loyalty3. Lack of group feeling4. Lack of tolerance in investors5. Informal organisation cannot work independently6. Horizontal movement reduces specialisation Z Theory: A practical experience in india- MARUTI UDYOG

LIMITED

1) Positive motivators- acc to Flippo- positive motivation is a process of attempting to influence others to do their work through the possibility of gain or reward.

2) Negative motivators- acc to Likert- in the long run negative motivation reduces the productivity.

3) Financial/monetary incentives- i.pay & allowances, ii.productivity linked wage incentive, iii.bonus, iv.profit sharing, v.co-partnership, vi.retirement benefits, vii.perquisites.

4) Non-financial/non-monetary incentives- i.status, ii.organisational climate, iii.career advancement opportunity, iv.job enrichment, v.employee recognition programmes, vi.job security, vii.employee participation, viii.employee empowerment, ix.praise, x.guarantee of justice, xi.knowledge of secret information, xii.fearless environment, xiii.job rotation.

Techniques of motivation

5)Individual motivators-Advantages: i. attraction for other employees,

ii.increases efficiency, iii.gives the employee a sense of prestige, iv.job evaluation is simple, v.attraction for new entrants.

6)Group motivators-Advantages: i.checks the feeling of mutual conflict,

ii.establish industrial peace, iii.all employees work with a team spirit, iv.more work at less time & less cost, v.raises the reputation of the enterprise.

7)Extrinsic motivators- get the benefit afterwards.8)Intrinsic motivators- get the benefit at the same

time.

1. A costly effort2. Trouble making employees3. It is an internal feeling4. Opposition to changes

Essentials/principles of motivation-

1. Productive2. Competitive3. Comprehensive4. Flexible5. Easily understandable6. Easy implementation 7. Increase in reputation

Problems or hurdles in motivation

8. Regular motivation9. Based on organizational goals 10. Based on standards11. Related to efforts12. Justifiable13. Less expensive