Module 1

Management

Objectives of the Chapter

• Definition of Management
• Nature, Scope
• Objectives, Importance
• Difference between Administration & Management
• Level and types of Managers
• Manager or Non-Manager
• Managerial roles
• Essential managerial Skills & Competencies
• Evolutions of Management thoughts
• Fayol’s fourteen principles
• Recent Trends in Management

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INTRODUCTION

• Impact of LPG

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• From Push to Pull Strategy

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• Customer at the top

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• All these factors have the corporate world to gain importance of management.

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What is Management?

• Most definitions a common idea of accomplishing the goals and people factor.

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• Mgmt. is the accomplishment of results through the efforts of other people. - Lawrence A. Appley

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• Management is art of getting things done through and with the people in formally organised groups. - Koontz H

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• Management is a process of planning, organising, actuating and controlling to determine and accomplish the objectives by the use of people and resources. - Terry G

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Nature and Purpose of Management

• Management as a goal oriented process
• Management as Group or Team
• Management is multidisciplinary
• Management as an activity
• Management as an Economic Resource
• Management as a system of authority
• Management is universal
• Management is dynamic
• According to Peter F Drucker ‘managers do not wait for the future; they create the future,

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Characteristics Of Management

• Management is intangible (unseen force – its presence can be felt by the results of its efforts in the form of production, sales and profits).
• Management is goal-oriented (management seeks to achieve goals. In a business organization the primary goal is to produce and distribute goods with a view to earn profit. Service organization goal is customer service)
• Management is universal (management is needed in all types of organization).
• Management is a social process (it deals with people, to make the best use of human efforts and managers have to create cooperation among employees in an organization)
• Management is a group activity (management helps people in realizing individual as well as group goals in a coordinated way)
• Management is a system of authority( management may be understood as rule making and rule enforcing body in an organization)
• Management is an activity ( it can be studied, knowledge about it obtained and skills in its application acquired)
• Management is dynamic ( growth oriented function, it tries to visualize the problems before they turn into emergencies.)
• Management is science as well as an art( systematized body of knowledge based on certain principles capable of general applications. Art is the application of knowledge and skills to achieve results)
• Management is multidisciplinary (it has contributions from various disciplines like psychology, sociology, anthropology etc)

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Management as a science

• Systematized body of knowledge
• Management is a social science
• Management is an inexcat science
• Scientific Methodology

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Management as an art

• Use of knowledge
• Creative art
• Personalized
• Constant practice

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Objectives of MOB

• Organizational Purpose
• Fair returns to Investor
• Survival & Long-term Existence with continuity
• Expanding business by searching business avenues
• Improving the Productivity and Goodwill
• Personal Purpose
• Reasonable Salary and Remuneration
• Proper Working Environment
• Training and Updates on technology
• Fair Opportunity for participation
• Security against job
• Social Purpose
• Quality and value of goods
• Timely Tax returns filing
• Avoid Exploitation of natural resources
• Supportive relations with stakeholders
• Uplifting Moral and Ethical Values

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Importance of Management

• Motivates to take initiative
• Encourages Innovation
• Helps in Expansion and Growth
• Increases the standard of Living of employees
• Improves Corporate Image
• Empowers the
• Reduces Waste of Resources
• Improves Efficiency
• Enhances Employee Relations
• Decreases Employee Absenteeism and Turnover
• Fosters Teamwork

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Scope of Management

• Activity Point of View
• Functional Areas of Management
• Agent of Change
• Universality of Management
• Global Reach
• Inter/Intra Industrial Presence
• Equally among Production and Service

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Difference b/n Administration & Management

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Managerial Competencies

• Global Awareness
• Planning and Administrative
• Teamwork and Leadership
• Strategic Action
• Building Network
• Communication
• Problem Solving
• Public Relation
• Interpersonal
• Integrity
• Emotional Quotient

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Functions of Management�

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• Planning: It is the process of deciding in advance what is to be done, when and where it is to be done, how it is to be done and by whom. A fundamental action leads to a better control.

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• Organising: It is process of creating a structure of relationships to enable employees to carry out management’s plans and meet its goals. (Tasks to be assigned, to be done and to be reported)

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• Staffing: the process by which organizations meet their HR needs, including forecasting requirement till recruiting, selecting and placing them in the job.

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Contd….

• Directing: It deals with the steps a manager takes (guiding, supervising, leading motivating, etc) to get subordinates and others to carry out plans.

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• Controlling: Objective is to check the proper implementation and successful execution of the plan.

It is concerned with monitoring employees’ activities, keeping the organisation on track towards its goals, and making correctionsas required. ( financial year endings evaluations done by the banking sector)

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Levels of Management

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Lower

Middle

Top

• Top-level managers: Responsible for making organisational wide decisions and establishing the goals and plans that affect the entire organisation (president, executive vice president)
• Middle managers: Link between the top level and the lower level to manage the work of first line managers(chief engineer, division head etc.)
• First-line managers (foreman, supervisor, section chief)�

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TOP MANAGEMENT

• Determines objectives and policies
• Designs the basic operating and financial structure of an organization
• Provides guidance and direction
• Lays down standards of performance
• Maintains good public relations

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MIDDLE MANAGEMENT

• Interprets and explains the policies framed by the top management
• Issues detailed instructions
• Participates in operating decisions
• Trains other managers

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LOWER MANAGEMENT

• Plans day-to-day operations
• Assigns jobs to workers
• Provides supervision and control over work
• Arranges material tools and equipment
• Maintains discipline

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Managerial Skills

Robert Katz, identified three skills

• Technical skills
• Human skills
• Conceptual skills

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Managerial Skills Contd…

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Technical skills

• The activity to use specific knowledge, methods, and techniques in performing work.
• It is the ability to use the tools, procedures or techniques of a specialized field. Technical skill is considered to be very crucial to the effectiveness of lower level managers because they are in direct contact with employees performing work activities within the firm.
• Eg. The success of a drilling supervisor of an oil rig depends a great deal on his technical knowledge of drilling.

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Human skills

• The ability to work with, understand, and motivate and get along with other people.
• The skill is essential at every level of management where the supervisor has frequent contact with operating personnel.

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Conceptual skills

• It is the mental ability to coordinate and integrate the organization’s interests and activities.
• It refers to the ability to see the ‘big picture’, to understand how a change in any given part can affect the whole organization.
• Key management skill related to the ability to visualize the organization as a whole, discern interrelationships among organization parts, and understand how the organization fits into the wider context of the industry, community and world.
• Ability to see the big picture of the organization

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Types of Managers

• Line Managers
• Staff Managers
• Functional Managers
• General Managers
• An Administrator

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• Line Managers: Responsible for the activities that directly contribute to the output of the organization. (The President, Departmental head, Regional Sales Manager)

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• Staff Managers: Use specific technical expertise to advise and support the efforts of line managers. (HR and Finance Manger, R&D Employees)

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• Functional Managers: Are responsible for one area of activity, such as finance, marketing, production, personnel, accounting or sales

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• General Managers: Are responsible for complex multi-functional units. (Plant Manager, Branch Heads

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• Administrators; a manager in a public ir non-profit organization. (Hospital administrator, public administrators etc)

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Managerial Roles

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Interpersonal

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Informational

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Decisional Role

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Evolution of � Management Thought

MAJOR MANAGEMENT GURUS & THEIR CONTRIBUTIONS

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Classical Approach

• Forms the foundation for the filed of management
• The schools for management thoughts are:
• Scientific Management
• Administrative Theory
• Bureaucratic Management

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Scientific Management

Early 1900s

• It is defined a “that kind of management which conducts a business or affairs by standards established, by facts or truths gained through systematic observation, experiment, or reasoning.”
• Major contributors:
• Frederick Winslow Taylor
• Frank and Lillian Gillbreth
• Henry L.Gantt

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F W Taylor

• F.W. Taylor is regarded as father of scientific management.
• He insisted on the introduction of scientific methods in management and made his first systematic study of management.
• Frederick Winslow Taylor 1878- joined as worker at the Midvale steel works. Graduated in science and engineering through evening study .1898- joined Bethlehem steel company as engineer. He studied the work processes and introduced the scientific management.

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Principles of scientific management: �

• Scientific investigation in the place of Rule Of Thumb.
• Harmony in Group Action
• Scientific selection, training, and placement of workers.
• Cooperation between management and workers.
• Maximum output in place of desired output.
• Equal distribution of work between managers and workers.

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Techniques of Scientific Management

• Time Study
• Scientific setting of fair days work = Std Time*Working Hours
• Motion study
• Standardization of equipment, tools, cost system etc.
• Differential piece rate plan
• Functional foremanship.

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Limitations of scientific management

• Monotony
• Excessive Control
• Monetary Motivation
• Workshop (Production) Focus
• Mechanistic view (cog in the machine)
• Impersonal approach
• Exploitation device
• No initiatives

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Frank and Lillian Gillbreth

• 1868-1924
• Motion study involves finding out the best sequence and minimum number of motions needed to complete a task.
• Explore new ways for eliminating unnecessary motions and reducing work fatigue.

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HENRY L.GANTT(1861-1919)

• Well known for

Task – and - bonus system

The Gantt chart

• Task – and - bonus system
• If the worker completed the work fast, i.e., in less than the standard time, he received a bonus.
• Gantt Chat
• It is a Simple chart that compares actual and planned performances.

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Contd…

• A Gantt chart is a horizontal bar chartdeveloped as a production control tool in 1917 by Henry L. Gantt, an American engineer and social scientist.

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• Frequently used as a tool in project management

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• Gantt chart provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project.

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Toys Production

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House Construction

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Henry Fayol’s 14 principles of management

Division of work: this is the principle of specialization which applies to all kinds of work. The more people specialize the more efficiently they can perform their work. Specialization increases output by making employees more efficiently.

Authority and responsibility: authority is the right to give orders and the power to obtain obedience. A manager might use both his official authority and personal authority while getting things done. Responsibility arises out of assignment of an activity. An individual to whom authority is given to exercise power , must also be prepared to bear responsibility to perform the work in a satisfactory manner.

Discipline: employees must obey and respect the rules that govern the enterprise. Good discipline is the effect of good leadership, a clear understanding between management and workers regarding the organization's rules and the judicious use of penalties foe the violation of the rules.

Unity of command : an employee should receive commands from only one superior. If an employee reports to more than one superior conflicts in instruction and confusion in authority would result.

Unity of direction: this principle calls for ‘one manager one plans for all the operations having the same objectives.

Subordination of individual interest to the general interest to the common good : in any organization , the interest of employees should not take precedence over the interest of organization as whole.

Remuneration of personnel : compensation for work done should be fair to both employees and employers.

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Centralization: decreasing the role of subordinates in decision making, increasing their role in decentralization.

Scalar chain: the graded chain of authority from top to bottom through which all the communications flow is termed as scalar chain.

Order: materials and people should be in right place at right time. A general principle in this respect is that “ a place for everything and everyone in his place

Equity: managers should be fair in dealing with employees. Equity is the combination of justice and kindness. The application of equity requires good sense ,experience, and good nature for soliciting loyalty and devotion from subordinates.

Stability of tenure: it is essential because time is required for an employee to get used to new work and succeed in doing it well. Management, must therefore implement practices which encourage long term commitment of employees. Instability of tenure can significantly affect the fortune of the company.

Initiative: employees must be encouraged to think through to implement a plan of action, even though some mistakes may result. The opportunity to perform independently is an essential component of employee growth and development.

Esprit de corps: this principle states that ‘union is strength’. Promoting team spirit will give the organization a sense of unity.

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Modern Approaches �to Management

• Mathematical/Quantitative Approach
• Systems Approach
• Contingency Approach
• Social System Approach
• Decision Making Approach

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Mathematical/Quantitative Approach�

• Russell L Ackoff , F W Lanchester & Thomas A Edison

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• E = f (X1, Y1);

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• Where,
• E represents system effectiveness (cost, profit & etc)
• X1 represents the variables of the system that are subject to control
• Y1 represents the variables that are not subject to control

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Systems Theory

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Resources

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• Labor
• Materials
• Capital
• Machinery
• Information

Managerial and

Technological

Abilities

• Planning
• Organizing
• Staffing
• Leading
• Controlling
• Technology

• Goods
• Services
• Profits and

losses

• Employee
• satisfaction

Inputs

Transformation process

Outputs

Feedback

Contingency Theory

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Systems Viewpoint

How the parts fits

together

• Individual
• Group
• Organization
• environment

Behavioral Viewpoint

How managers influence

others

• Interpersonal Roles
• Informational Roles
• Decisional Roles

Traditional

viewpoint

What managers

do

• Plan
• Organize
• Lead
• Control

Contingency Viewpoint

Managers’ use of other view points to solve problems

• External environment
• Technology
• Individuals

Recent Trends in Management

• International Focus
• Need for a Vision
• The challenge of quality
• The challenge of cultural diversity
• The need for training
• Innovation and change
• The need for ethics
• Staying close to customer
• Promoting autonomy and entrepreneurship
• Productivity and profitability
• Corporate social responsibility

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PLANNING

Module 2, MBP

Planning

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Meaning and Definition

• A Plan is a forecast for accomplishment, It’s a predetermined action, It is today’s projection for tomorrows activity.

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• “Planning is deciding in advance what is to be done in future” - Koontz

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• “Planning is ‘anticipatory’ decision making” – Alford and Beatty

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Planning Questions

• Where we are now?

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• Where do we want to be?

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• Gap?

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• How can we get there from here?

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What is an Ideal Plan?

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Important: goals are given to the employee with little input

Examples of S.M.A.R.T. Goals?

• Walgreens: “Second is to hire a significant number of people with disabilities in our South Carolina distribution center, scheduled to open in 2007, and achieve 20% productivity gains there.”
• UPS: “65% of drivers will have access to the new technology (implemented in 2004) by the end of 2005.” and “In 2005, we will increase operating profit in each of our 3 key businesses: domestic, int’l, supply chain.”
• Wrigley: “In 2005, the company will decrease the long-term rate of return assumption for the assets of its U.S. (pension) plans from 8.75 % to 8.5%.”

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• Halliburton: “We estimate that 74% of the backlog existing on 12/31 will be eliminated the following fiscal year.”
• Martha Stewart Living Omnimedia: “In 2004 we will discontinue the Catalog for Living and its online product options, and sell remaining inventory in early fiscal 2005.”
• Starbucks: “In fiscal 2006, we plan to open approximately 1,800 net new stores globally.”

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How to Make a Plan That Works

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Nature of Planning

• Planning is goal oriented
• Planning is a primary function
• Planning is all-pervasive
• Planning is a mental exercise
• Planning is a continuous process
• Planning involves choice
• Planning is forward looking
• Planning is flexible
• Planning is an integrated process
• Planning includes efficiency and effectiveness

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Types of Plans

1. Missions or purposes
2. Objectives or goals
3. Strategies
4. Policies
5. Procedures
6. Rules
7. Programs
8. Budgets

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Mission or Purpose

• The basic purpose or function or tasks of an enterprise or any part of it.
• Is the very basic reason and justification for the existence of the firm.
• An organizations mission statement states what it is, why it exists and the unique contribution it can make.
• It is characterized as
• Customer oriented (To pursue the creation of value of Aditya Birla Group)
• Future Oriented
• Dynamic (Movie industry or entertainment industry?)

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Objectives or Goals

• Objective: End point of a management programme. it’s a desire state of affairs which the organization attempts to realize.

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• Goal: Are the objectives towards which organizations direct their energies and concerns.

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• Objectives are action oriented, they form the basis for work and provide a yardstick for measuring performance.

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• Identifying the objectives is like identifying the North Star in the sky at night to locate the direction

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Strategies

• Strategy is defined as the determination of the basic long term objectives of an enterprise and the adoption of course of action and allocation of resources necessary to achieve these goals.

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• The term basically is taken from military to mean grand plans made in light of what it was believed an adversely might or might not do.

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Policy

• Are the general statements or understandings that guide or channelize thinking in decision making.

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• Policies define an area within which a decision is to be made and ensure that the decision will be consistent with, and contribute to, an objective.

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• Policies help to decide issues before they become problem, make it unnecessary to analyze the same situation every time it comes and disturb the system.

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Procedures

• Are the plans that establish a required method of handling future activities. They are chronological sequence of required actions and they detail the exact manner in which certain activities must be accomplished.

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• Example of processing an order of the dealer. Procedure of recruitment, procedure to appraise the performances of the employees etc.

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Rules

• Rules spell out specific required actions or non actions, allowing no discretion. They are the simplest plans, “No smoking “ is a rule that allows no deviation from a stated course of action.

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• Rules are different from policies; policies meant to guide decision making by marking off areas in which managers can use their discretion, while rules allow no discretion in their application.

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Programs

• A complex of goals, policies, procedures, task assignments, steps to be taken, resources to be employed to carry out a given course of action; they are ordinarily supported by budgets

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• As major as airline merger to minor as program of a supervisor to train the workers on some modules/new machinery.

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Budgets

• Is a statement of expected results expressed in numerical terms. May be called a ‘quantified plan’.
• A budget may be expressed in financial terms, labor hours, units of production, or in any numerical terms.
• It may deal with operation, as an expense budget, capital outlays, cash flow etc.
• A budget is a controlling device.

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Module 2

ORGANIZING

Organising

• Organizing is the process by which employees, facilitates and tasks are related to each other, with a view to achieve specific goals. It refers to the way work is arranged and allocated among members of the orgn. so as to achieve goals.

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• The process of organizing involves following steps.

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• Identifying the work
• Grouping the work
• Establishing relationships
• Delegating authority
• Providing for coordination and control

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Organizational Structure?

Specification of the jobs to be done within an organization and the ways in which they relate to one another.

This allows the organization to achieve its goals.

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Types of Organization Structure

• Line & Staff Organization
• Functional Organization
• Divisional Organization
• Matrix Organization
• Project Organization

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Determinants of Organization

• Every business needs structure to operate. Organizational structure varies according to a firm’s mission, purpose, and strategy.

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• Size, technology, and changes in environmental circumstances also influence structure.

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Although all organizations have the same basic elements, each develops the structure that contributes to the most efficient operations.

Line Organization Structure

• Line organization structure is the oldest and simplest form of organization. In these organizations, a supervisor exercises direct supervision over a subordiate. Also, authority flows from the top-most person in the organization to the person in the lowest rung.
• This type of an organization is also called a military organization or a scalar-type organization.
• It is also known as the chain of command or scalar principle.

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Line Organization Structure

Advantages

Disadvantages

• Simplicity
• Promptness in action
• Fixed Responsibility
• Adaptability

• Excess Work
• Absence of Specialization
• Complexity in Coordination
• Incompetence

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Line and Staff

• Line-staff organization, in management, approach in which authorities (e.g., managers) establish goals and directives that are then fulfilled by staff and other workers. A line-staff organizational structure attempts to render a large and complex enterprise more flexible without sacrificing managerial authority.

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• Although line and staff may operate at different levels of an organization, all positions are defined relative to their line or staff function.

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Line & Staff Orgn Structure

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Line & Staff

Advantages

Disadvantages

• Reduces workload of line Managers
• Specialist Advice
• Expert is Chosen
• Improved Synchranization

• May lead to Confusion
• Dependency on staff experts
• Conflicts
• Expensive
• Passing the bug

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Functional Departmentalization

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Functional Departmentalization

Advantages

• creates highly skilled specialists
• lowers costs through reduced duplication
• communication and coordination problems are lessened

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Disadvantages

• cross-department coordination can be difficult
• may lead to slower decision making
• produces managers with narrow experiences

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Divisional Structure

• The departmentalizing in which positions are grouped according to similarity of products, services or markets.
• A divisional structure creates a set of essentially autonomous companies in terms of products, services or markets. It is designed to promote independent and self contained units.
• There are three major forms – product, geographic and customer…

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Product Departmentalization

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Product Departmentalization

Advantages

• managers specialize but have broader experience
• easier to assess work-unit performance
• decision making is faster

Disadvantages

• duplication often increases costs
• difficult to coordinate across departments

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Customer Departmentalization

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Customer Departmentalization

Advantages

• focuses on customer needs
• products and services tailored to specific customers

Disadvantages

• duplication of resources
• difficult to achieve coordination across departments
• decisions that please the company but may hurt the company

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Geographic Departmentalization

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Geographic Departmentalization

Advantages

• responsive to demand of different markets
• reduce costs by locating resources close to customers

Disadvantages

• duplication of resources
• difficult to coordinate across departments

MBA DEPT, RIT HASSAN

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92

Departmentation by Process

PMOB 22MBA11

93

MBA DEPT, RIT HASSAN

Suits the manufacturing setups

Enables the organization to reap the benefits of specialization

On the negative side the problem of coordination occurs

Departmentation by time

PMOB 22MBA11

94

MBA DEPT, RIT HASSAN

Basic advantage of manpower utilization

Workers may ignore the total view of the ofgn

Duplication of functions

Matrix Departmentalization

A hybrid structure in which two or more forms of departmentalization are used together

​

• most common forms combine product and functional
• employees report to two bosses
• increased cross-functional interaction
• significant interaction between functional and project managers required

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PMOB 22MBA11

95

Matrix Organization

Organizational structure in which teams are formed and team members report to two or more managers

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• A matrix is a highly flexible form that is readily adaptable to changing circumstances.
• Matrix structures rely heavily on committee and team authority.
• Some companies use the matrix organization as a temporary measure to complete a specific project. The end of the project usually means the end of the matrix.

Matrix Structure

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President

Design

Vice President

Manufacturing

Vice President

Marketing

Vice President

Product

Manger A

Product

Manger B

Product

Manger C

Director of

Product

Operations

[Draft, 1998,p.225]

Example: University

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President

VP

Finace &

Administration

VP

Research &

Lecturing

VP

Student Matters

VP

Planning

Language

Department

Economics

Department

English

French

Marketing

Accounting

Director

Masters

Programme

Director

Undergraduate

Programme

Prof. A

Prof. C

Prof. B

Prof. D

Matrix Structure

• Strengths
• Efficient usage of resources
• Flexibility to work on multipurpose projects
• Technical excellence
• Balance
• Freeing Top mgmt
• Motivation
• Development

• Weaknesses
• Power struggles
• Stress
• Costs
• Balance
• Ego problems

MBA DEPT, RIT HASSAN

PMOB 22MBA11

99

Project Organization

• A project organisation is one, in which a project structure is created as a separate unit or division within a permanent functional structure; drawing specialists and workers from various functional departments who work under the overall leadership, control and co-ordination of a project manager to complete projects of a technical and costly nature.

​

• “A project organisation is a preferred means whenever a well defined project must be dealt with or the task is bigger than anything, the organisation is accustomed to.”
• George R. Terry

​

MBA DEPT, RIT HASSAN

PMOB 22MBA11

100

Project Organization

MBA DEPT, RIT HASSAN

PMOB 22MBA11

101

Principles of Organization

• Unity of Objectives
• Span of Management
• Exception Principle
• Unity of Direction
• Authority & Responsibility
• Flexibility

• Efficiency
• Division of Work
• Scalar Principle
• Unity of Direction
• Balance
• Continuity
• Functional Definition

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102

Chain of Command

• Is the line of authority extending from upper organizational levels to the lowest levels, which clarifies who reports to whom?

​

• It helps the employees to answer questions such as “Who do I go if I have a problem?” or “To whom am I responsible?”

​

• Chain of Command will easier the concepts like,
• Authority
• Responsibility
• Unity of Command and etc…

​

• The concept has become less relevant because of things like Information Technology. Employees through out the organization can access information that used to be available only to top managers in a fraction of second, without formal channel of communication employees can communicate to each other.

​

MBA DEPT, RIT HASSAN

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103

Span of Control

• The number of employees a manager can efficiently and effectively manage.

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O

R

G

Nl

​

L

E

V

E

L

​

Narrow Span

Span of 4:

Employees=4096

Managers (level 1-6) =1365

Span of 8

Employees=4096

Managers (level 1-4) = 585

Wider Span

Situational Context to Span of Control

• Capacity of the Superior : Factors like his ability to understand the problem, to get along with people easily, ability to command respect and loyalty.

​

• Capacity of Subordinates: If subordinates are well trained, developed, experienced and competent wider span is recommended.

​

• Nature of Work: Where the work is simple and standardized, policies are established wide span can be made, if the work is divergent and complicated issues to be handled narrow span is recommended.

​

• Degree of Decentralization and delegation: The ability of a manger to delegate the authority and his capacity to extract work from the subordinates makes the span wider.

​

• Staff assistance provided: If the staff is highly expertise to make decisions and implement it effectively the span becomes woder.

​

MBA DEPT, RIT HASSAN

PMOB 22MBA11

105

Flat Organizational Structure --Vertical Structure.

Characteristic of decentralized companies with relatively few layers of management and relatively wide spans of control

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106

Typical Law Firm

Relatively wide span of control

5 - 106

Tall Organizational Structure -Vertical

Characteristic of centralized companies with multiple layers of management and relatively narrow spans of control

MBA DEPT, RIT HASSAN

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107

United States Army

5 - 107

Relatively narrow span of control.

At lower levels, where tasks are similar and simpler, span of control widens.

Effects on orgn. structure

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Centralization & Decentralization

• A simple way to understand if an organization is working in a centralized or decentralized manner is by looking at two important aspects:
• The place of the decision-making authority in the hierarchy of the management i.e. Centralized.
• The degree of decision-making power at the lower echelons in the organization i.e. Decentralized.

�

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Advantages of Centralization

• The organization can strictly enforce uniformity of procedures and policies.
• It can help in the elimination of overlapping or duplicate activities and save costs.
• The organization has a better chance of utilizing the potential of its outstanding employees.
• It offers a better controlIt offers a better control over the activities of the organization by ensuring consistency in operations and uniformity in decision-making.

​

MBA DEPT, RIT HASSAN

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110

Advantages of De-Centralization

• Faster decision-making and better quality of decisions
• Improves the effectiveness of managers.
• Offers a democratic environment where employees can have a say in their governance.
• Provides good exposure to mid and lower-level managers and creates a pool of promotable manpower with managerial skills.
• Since managers can see the results of their own actions, they are more driven and have improved morales.

​

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111

MBA DEPT, RIT HASSAN

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112

WHO IS A LEADER?

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113

LEADERS – Great visionaries

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114

LEADERS - now

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115

The list continues…………………..

What Is Leadership?

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​

​

The ability to influence a group toward the achievement of goals.

​

A leader is one who sets vision, goals and motivates people and obtains their commitment to achieve the goals and realize the vision.

​

Management

Use of authority inherent in designated formal rank to obtain compliance from organizational members.

Contd…

• It is the ability of a manager to induce subordinates to work with zeal and confidence. Koontz and O’Donnell

​

• Points in the definition are
• Existence of followers
• Interpersonal Influence
• Uneven power sharing
• Common goals
• Situational
• It is a continuous process
• Promotes two-way relationship

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� Distinguishing Leaders From Managers

• According to K E Chung, following are the attributes of leaders distinguish from managers

​

• Leaders have followers, on the other hand manager has to supervise the subordinates.
• Leaders have emotional appeal
• Managers are expected to be rational decision makers and problem solvers. Leaders are expected to be charismatic, exciting and visionary
• Leaders meet the needs of the followers, whereas managers are concerned with attaining organizational goals.

MBA DEPT, RIT HASSAN

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Distinguishing

Leadership

• Narrow term
• Exists in unorganized groups, no formal structure is needed
• Is activity of influencing people to strive willingly for group goals.
• Leaders get authority by virtue of their skills, abilities and the situational demands, Followers must also consent to being influenced.

Managership

​

• Wider term

​

• Requires a organized structure
• Implies exercising functions like planning, organizing, staffing, directing, and controlling to achieve group goals. Leadership is an aspect of one of these functions.
• Managers get formal authority delegated from above.

MBA DEPT, RIT HASSAN

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119

Leaders vs. Managers

• LEADERS:
• innovate
• focus on people �
• inspire trust
• have a long-range view
• ask what and why
• have eyes on horizon�
• originate
• challenge status quo
• do the right thing

• MANAGERS:
• administrate
• focus on systems and structures
• rely on control
• have a short-range view
• ask how and when
• have eyes on bottom line
• initiate
• accept status quo
• do things right

MBA DEPT, RIT HASSAN

PMOB 22MBA11

120

Traits of effective leadership

• Some researchers believed cognitive and psychological factors like intelligence, ambition, aggressiveness are common traits in leaders

​

• Others believed height, large body structure and personal attractiveness are important

​

• Initiative, desire to lead, integrity, self-confidence, analytical ability, charisma, creativity etc are some of the common traits of a leader

MBA DEPT, RIT HASSAN

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121

Leadership Traits

122

MBA DEPT, RIT HASSAN

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Exhibit 17–1 Seven Traits Associated with Leadership

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123

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PMOB 22MBA11

124

Leadership Styles

​

• This theory suggests four (4) major styles of leadership.

​

• Autocratic
• Democratic
• Laissez-faire (Delegative)
• Paternalistic

125

MBA DEPT, RIT HASSAN

PMOB 22MBA11

Autocratic Leadership

• With this style the leader:
• Directs and/or orders participants on what to do, when to do it and how long to continue
• Followers are expected to do as directed.
• The leader has the primary responsibility to make decisions, to determine policies and to develop procedures.
• In this style, the leader may not tell participants reasons for his/her orders.

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126

The Motto of the Autocratic Style

“Do what I tell you!”

​

“You MUST do this NOW!”

​

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127

Democratic Leadership

​

• With this style the leader:
• leader and the group members share responsibilities for making decisions.
• Participants make decisions based on information provided by the leader.
• Developing trust and mutual respect are part of this concept.
• Voting and “majority rule” are elements of this leadership style.

​

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The Motto of the Democratic Style

“What do you think”

​

“Let’s see what the group wants to do”

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Laissez-faire Leadership

• With this style the leader:
• Freedom for making decisions is given to participants with this leadership style.
• The leader provides guidance, information and assistance when needed.
• The leadership for decisions comes from within the group.
• The leader may be the person who assumes control of the group and/or the one who does the majority of work.

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130

The Motto of the Laissez-faire Leadership

“Make your own decisions to achieve the goals”

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131

Paternalistic Leadership

​

• With this style the leader:
• Leader acts as a ‘father figure.’
• Paternalistic leader makes decision but may consult.
• Believes in the need to support staff.

​

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132

The Motto of the Paternalistic Style

“Do as I do”

​

“This is how it must be done! Watch ME!”

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PMOB 22MBA11

133

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PMOB 22MBA11

134

Contingency Approaches to Leadership

• Sometimes the success of a leader does not depend upon the qualities, traits and behaviour of a leader alone. The context in which a leader exhibits her/his skills, traits and behaviour matters, because same style of functioning may not be suitable for different situations. Thus the effectiveness of leadership also depends upon situations.
• This theory views leadership in terms of a dynamic interaction between a number of situational variables like the leader, the followers, the task situation, the environment, etc. Some of the noteworthy studies on situational contexts that gained wide recognition include
• Fiedler‟s model,
• Hersey and Blanchard‟s Situational theory,
• Leader-Member Exchange theory,
• Path-Goal theory and
• Leader-Participation model

MBA DEPT, RIT HASSAN

PMOB 22MBA11

135

Contingency Theory Approach Description

• Contingency theory is a leader-match theory (Fiedler & Chemers, 1974)
• Tries to match leaders to appropriate situations

​

• Leader’s effectiveness depends on how well the leader’s style fits the context

​

• Fiedler’s generalizations about which styles of leadership are best and worst are based on empirically grounded generalizations

MBA DEPT, RIT HASSAN

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Perspective

Contingency Theory Approach Description

• Assessment based on:
• Leadership Styles
• Situational Variables

Definition

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• Effective leadership is contingent on matching a leader’s style to the right setting

Leadership Styles

Leadership styles are described as:

• Task-motivated (Low LPCs)
• Leaders are concerned primarily with reaching a goal
• Relationship-motivated (High LPCs)
• Leaders are concerned with developing close interpersonal relationships

MBA DEPT, RIT HASSAN

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Leader Style Measurement Scale (Fiedler)

Situational Variables/3 Factors

• Leader-Member Relations

- Refers to the group atmosphere and the degree of confidence, loyalty, and attraction of followers for leader

• Group atmosphere –
• Good – high degree of subordinate trust, liking, positive relationship
• Poor – little or no subordinate trust, friction exists, unfriendly

​

MBA DEPT, RIT HASSAN

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Situational Variables/3 Factors

​

• Task Structure
• Concerns the degree to which requirements of a task are clear and spelled out
• High Structure –
• requirements/rules - are clearly stated/known
• path to accomplish - has few alternatives
• task completion - can be clearly demonstrated
• limited number - correct solutions exist

​

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Situational Variables/3 Factors

​

• Task Structure, cont’d.
• Concerns the degree to which requirements of a task are clear and spelled out
• Low Structure –
• requirements/rules - not clearly stated/known
• path to accomplish - has many alternatives
• task completion - cannot be clearly demonstrated/verified
• unlimited number - correct solutions exist

​

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Situational Variables/3 Factors

• Position Power
• Designates the amount of authority a leader has to reward or punish followers
• Strong Power –
• authority to hire or fire, give raises in rank or pay
• Weak Power –
• no authority to hire or fire, give raises in rank or pay

​

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Situational Variables/3 Factors

• 3 Factors - determine the favorableness of various situations in organizations
• Situations that are rated:
• Most Favorable -
• good leader-follower relations,
• defined tasks (high structure), &
• strong leader position power

MBA DEPT, RIT HASSAN

PMOB 22MBA11

143

Situational Variables/3 Factors

• 3 Factors - determine the favorableness of various situations in organizations
• Situations that are rated:
• Least Favorable -
• Poor leader-follower relations,
• unstructured tasks (low structure), &
• Weak leader position power
• Moderately Favorable –
• Fall in between these extremes

MBA DEPT, RIT HASSAN

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144

Contingency Model

MBA DEPT, RIT HASSAN

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145

Research Findings of Leader Style Effectiveness

146

PMOB 22MBA11

LPC Score

Favorableness

of Situation

Definition

Low

Very Favorable

Very Unfavorable

Situations going smoothly

Situations out of control

High

Moderately

Favorable

​

Situations with some degree

of certainty; not completely

in or out of leader’s control

​

Research Findings of Leader Style Effectiveness

• Reasons for leader mismatch ineffectiveness:
• LPC style doesn’t match a particular situation; stress and anxiety result
• Under stress, leader reverts to less mature coping style learned in

earlier development

• Leader’s less mature coping style results in poor decision making and consequently negative work outcomes

147

PMOB 22MBA11

Contingency Theory Approach

• By assessing the 3 situational variables, any organizational context can be placed in one of the 8 categories represented in the Contingency Theory Model
• After the nature of a situation is determined, the fit between leader’s style and the situation can be evaluated

• By measuring Leader’s LPC score and the 3 situational variables, it is possible to predict whether a leader will be effective in a particular setting

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Focus

Overall Scope

How Does Contingency Theory Work?

Effective in Categories –

1, 2, 3, & 8

• If individuals style matches appropriate category in the model, leader will be effective
• If individuals style does not match appropriate category in the model, leader will not be effective

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Low LPCs – Task-Oriented

Middle LPCs

High LPCs – Relationship-Oriented

Effective in Categories –

4, 5, 6, & 7

Effective in Categories –

1, 2, & 3

How Does Contingency Theory Work?

MBA DEPT, RIT HASSAN

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How Does it Work?

Example:

Situation

Leader–Member Relation – Good

Task Structure – High

Position Power – High

Category – 1

Low LPC – (Individual who is task-oriented will be effective)

By measuring Leader’s LPC score and the 3 situational variables, it is possible to predict whether a leader will be effective in a particular setting

Strengths

• Empirical support. Contingency theory has been tested by many researchers and found to be a valid and reliable approach to explaining how to achieve effective leadership.

​

• Broadened understanding. Contingency theory has broadened the scope of leadership understanding from a focus on a single, best type of leadership (e.g., trait approach) to emphasizing the importance of a leader’s style and the demands of different situations.

​

• Predictive. Because Contingency theory is predictive, it provides relevant information regarding the type of leadership that is most likely to be effective in particular contexts.

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Strengths

• Not an all-or-nothing approach. Contingency theory contends that leaders should not expect to be effective in every situation; thus companies should strive to place leaders in optimal situations according to their leadership style.

​

• Leadership profiles. Contingency theory supplies data on leadership styles that could be useful to organizations in developing leadership profiles for human resource planning.

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Criticisms

• Fails to fully explain why leaders with particular leadership styles are more effective in some situations than others
• Criticism of LPC scale validity as it does not correlate well with other standard leadership measures
• Cumbersome to use in real-world settings
• Fails to adequately explain what should be done about a leader/situation mismatch in the workplace

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153

Leading �PMOB MODULE 2

WHO IS A LEADER?

MBA DEPT, RIT HASSAN

PMOB 22MBA11

155

LEADERS – Great visionaries

MBA DEPT, RIT HASSAN

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156

LEADERS - now

MBA DEPT, RIT HASSAN

PMOB 22MBA11

157

The list continues…………………..

What Is Leadership?

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158

​

​

The ability to influence a group toward the achievement of goals.

​

A leader is one who sets vision, goals and motivates people and obtains their commitment to achieve the goals and realize the vision.

​

Management

Use of authority inherent in designated formal rank to obtain compliance from organizational members.

Contd…

• It is the ability of a manager to induce subordinates to work with zeal and confidence. Koontz and O’Donnell

​

• Points in the definition are
• Existence of followers
• Interpersonal Influence
• Uneven power sharing
• Common goals
• Situational
• It is a continuous process
• Promotes two-way relationship

MBA DEPT, RIT HASSAN

PMOB 22MBA11

159

� Distinguishing Leaders From Managers

• According to K E Chung, following are the attributes of leaders distinguish from managers

​

• Leaders have followers, on the other hand manager has to supervise the subordinates.
• Leaders have emotional appeal
• Managers are expected to be rational decision makers and problem solvers. Leaders are expected to be charismatic, exciting and visionary
• Leaders meet the needs of the followers, whereas managers are concerned with attaining organizational goals.

MBA DEPT, RIT HASSAN

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Distinguishing

Leadership

• Narrow term
• Exists in unorganized groups, no formal structure is needed
• Is activity of influencing people to strive willingly for group goals.
• Leaders get authority by virtue of their skills, abilities and the situational demands, Followers must also consent to being influenced.

Managership

​

• Wider term

​

• Requires a organized structure
• Implies exercising functions like planning, organizing, staffing, directing, and controlling to achieve group goals. Leadership is an aspect of one of these functions.
• Managers get formal authority delegated from above.

MBA DEPT, RIT HASSAN

PMOB 22MBA11

161

Leaders vs. Managers

• LEADERS:
• innovate
• focus on people �
• inspire trust
• have a long-range view
• ask what and why
• have eyes on horizon�
• originate
• challenge status quo
• do the right thing

• MANAGERS:
• administrate
• focus on systems and structures
• rely on control
• have a short-range view
• ask how and when
• have eyes on bottom line
• initiate
• accept status quo
• do things right

MBA DEPT, RIT HASSAN

PMOB 22MBA11

162

Traits of effective leadership

• Some researchers believed cognitive and psychological factors like intelligence, ambition, aggressiveness are common traits in leaders

​

• Others believed height, large body structure and personal attractiveness are important

​

• Initiative, desire to lead, integrity, self-confidence, analytical ability, charisma, creativity etc are some of the common traits of a leader

MBA DEPT, RIT HASSAN

PMOB 22MBA11

163

Leadership Traits

164

MBA DEPT, RIT HASSAN

PMOB 22MBA11

Exhibit 17–1 Seven Traits Associated with Leadership

MBA DEPT, RIT HASSAN

PMOB 22MBA11

165

MBA DEPT, RIT HASSAN

PMOB 22MBA11

166

Leadership Styles

​

• This theory suggests four (4) major styles of leadership.

​

• Autocratic
• Democratic
• Laissez-faire (Delegative)
• Paternalistic

167

MBA DEPT, RIT HASSAN

PMOB 22MBA11

Autocratic Leadership

• With this style the leader:
• Directs and/or orders participants on what to do, when to do it and how long to continue
• Followers are expected to do as directed.
• The leader has the primary responsibility to make decisions, to determine policies and to develop procedures.
• In this style, the leader may not tell participants reasons for his/her orders.

MBA DEPT, RIT HASSAN

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The Motto of the Autocratic Style

“Do what I tell you!”

​

“You MUST do this NOW!”

​

MBA DEPT, RIT HASSAN

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Democratic Leadership

​

• With this style the leader:
• leader and the group members share responsibilities for making decisions.
• Participants make decisions based on information provided by the leader.
• Developing trust and mutual respect are part of this concept.
• Voting and “majority rule” are elements of this leadership style.

​

MBA DEPT, RIT HASSAN

PMOB 22MBA11

170

The Motto of the Democratic Style

“What do you think”

​

“Let’s see what the group wants to do”

MBA DEPT, RIT HASSAN

PMOB 22MBA11

171

Laissez-faire Leadership

• With this style the leader:
• Freedom for making decisions is given to participants with this leadership style.
• The leader provides guidance, information and assistance when needed.
• The leadership for decisions comes from within the group.
• The leader may be the person who assumes control of the group and/or the one who does the majority of work.

MBA DEPT, RIT HASSAN

PMOB 22MBA11

172

The Motto of the Laissez-faire Leadership

“Make your own decisions to achieve the goals”

MBA DEPT, RIT HASSAN

PMOB 22MBA11

173

Paternalistic Leadership

​

• With this style the leader:
• Leader acts as a ‘father figure.’
• Paternalistic leader makes decision but may consult.
• Believes in the need to support staff.

​

MBA DEPT, RIT HASSAN

PMOB 22MBA11

174

The Motto of the Paternalistic Style

“Do as I do”

​

“This is how it must be done! Watch ME!”

MBA DEPT, RIT HASSAN

PMOB 22MBA11

175

MBA DEPT, RIT HASSAN

PMOB 22MBA11

176

Contingency Approaches to Leadership

• Sometimes the success of a leader does not depend upon the qualities, traits and behaviour of a leader alone. The context in which a leader exhibits her/his skills, traits and behaviour matters, because same style of functioning may not be suitable for different situations. Thus the effectiveness of leadership also depends upon situations.
• This theory views leadership in terms of a dynamic interaction between a number of situational variables like the leader, the followers, the task situation, the environment, etc. Some of the noteworthy studies on situational contexts that gained wide recognition include
• Fiedler‟s model,
• Hersey and Blanchard‟s Situational theory,
• Leader-Member Exchange theory,
• Path-Goal theory and
• Leader-Participation model

MBA DEPT, RIT HASSAN

PMOB 22MBA11

177

Contingency Theory Approach Description

• Contingency theory is a leader-match theory (Fiedler & Chemers, 1974)
• Tries to match leaders to appropriate situations

​

• Leader’s effectiveness depends on how well the leader’s style fits the context

​

• Fiedler’s generalizations about which styles of leadership are best and worst are based on empirically grounded generalizations

MBA DEPT, RIT HASSAN

PMOB 22MBA11

178

Perspective

Contingency Theory Approach Description

• Assessment based on:
• Leadership Styles
• Situational Variables

Definition

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• Effective leadership is contingent on matching a leader’s style to the right setting

Leadership Styles

Leadership styles are described as:

• Task-motivated (Low LPCs)
• Leaders are concerned primarily with reaching a goal
• Relationship-motivated (High LPCs)
• Leaders are concerned with developing close interpersonal relationships

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Leader Style Measurement Scale (Fiedler)

Situational Variables/3 Factors

• Leader-Member Relations

- Refers to the group atmosphere and the degree of confidence, loyalty, and attraction of followers for leader

• Group atmosphere –
• Good – high degree of subordinate trust, liking, positive relationship
• Poor – little or no subordinate trust, friction exists, unfriendly

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Situational Variables/3 Factors

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• Task Structure
• Concerns the degree to which requirements of a task are clear and spelled out
• High Structure –
• requirements/rules - are clearly stated/known
• path to accomplish - has few alternatives
• task completion - can be clearly demonstrated
• limited number - correct solutions exist

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Situational Variables/3 Factors

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• Task Structure, cont’d.
• Concerns the degree to which requirements of a task are clear and spelled out
• Low Structure –
• requirements/rules - not clearly stated/known
• path to accomplish - has many alternatives
• task completion - cannot be clearly demonstrated/verified
• unlimited number - correct solutions exist

​

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Situational Variables/3 Factors

• Position Power
• Designates the amount of authority a leader has to reward or punish followers
• Strong Power –
• authority to hire or fire, give raises in rank or pay
• Weak Power –
• no authority to hire or fire, give raises in rank or pay

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Situational Variables/3 Factors

• 3 Factors - determine the favorableness of various situations in organizations
• Situations that are rated:
• Most Favorable -
• good leader-follower relations,
• defined tasks (high structure), &
• strong leader position power

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Situational Variables/3 Factors

• 3 Factors - determine the favorableness of various situations in organizations
• Situations that are rated:
• Least Favorable -
• Poor leader-follower relations,
• unstructured tasks (low structure), &
• Weak leader position power
• Moderately Favorable –
• Fall in between these extremes

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Contingency Model

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Research Findings of Leader Style Effectiveness

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PMOB 22MBA11

LPC Score

Favorableness

of Situation

Definition

Low

Very Favorable

Very Unfavorable

Situations going smoothly

Situations out of control

High

Moderately

Favorable

​

Situations with some degree

of certainty; not completely

in or out of leader’s control

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Research Findings of Leader Style Effectiveness

• Reasons for leader mismatch ineffectiveness:
• LPC style doesn’t match a particular situation; stress and anxiety result
• Under stress, leader reverts to less mature coping style learned in

earlier development

• Leader’s less mature coping style results in poor decision making and consequently negative work outcomes

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Contingency Theory Approach

• By assessing the 3 situational variables, any organizational context can be placed in one of the 8 categories represented in the Contingency Theory Model
• After the nature of a situation is determined, the fit between leader’s style and the situation can be evaluated

• By measuring Leader’s LPC score and the 3 situational variables, it is possible to predict whether a leader will be effective in a particular setting

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Focus

Overall Scope

How Does Contingency Theory Work?

Effective in Categories –

1, 2, 3, & 8

• If individuals style matches appropriate category in the model, leader will be effective
• If individuals style does not match appropriate category in the model, leader will not be effective

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Low LPCs – Task-Oriented

Middle LPCs

High LPCs – Relationship-Oriented

Effective in Categories –

4, 5, 6, & 7

Effective in Categories –

1, 2, & 3

How Does Contingency Theory Work?

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How Does it Work?

Example:

Situation

Leader–Member Relation – Good

Task Structure – High

Position Power – High

Category – 1

Low LPC – (Individual who is task-oriented will be effective)

By measuring Leader’s LPC score and the 3 situational variables, it is possible to predict whether a leader will be effective in a particular setting

Strengths

• Empirical support. Contingency theory has been tested by many researchers and found to be a valid and reliable approach to explaining how to achieve effective leadership.

​

• Broadened understanding. Contingency theory has broadened the scope of leadership understanding from a focus on a single, best type of leadership (e.g., trait approach) to emphasizing the importance of a leader’s style and the demands of different situations.

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• Predictive. Because Contingency theory is predictive, it provides relevant information regarding the type of leadership that is most likely to be effective in particular contexts.

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Strengths

• Not an all-or-nothing approach. Contingency theory contends that leaders should not expect to be effective in every situation; thus companies should strive to place leaders in optimal situations according to their leadership style.

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• Leadership profiles. Contingency theory supplies data on leadership styles that could be useful to organizations in developing leadership profiles for human resource planning.

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Criticisms

• Fails to fully explain why leaders with particular leadership styles are more effective in some situations than others
• Criticism of LPC scale validity as it does not correlate well with other standard leadership measures
• Cumbersome to use in real-world settings
• Fails to adequately explain what should be done about a leader/situation mismatch in the workplace

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Path-Goal Leadership Model

• Is used to select the leadership style (directive, supportive, participative, or achievement-oriented) appropriate to the situation (subordinate and environment) to maximize both performance and job satisfaction
• Attempts to explain how leader behavior influences performance and satisfaction of followers

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House Path-Goal Leadership Model

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Source: Adapted from R.J. House, “A Path-Goal Theory of Leader Effectiveness,” Administrative Science Quarterly 16 (2), 1971: 321–329.

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FOLLOWERS LEADER SITUATION

Subordinates None Environment

(authoritarianism (task structure,

locus of control, formal authority,

ability) and work group)

​

LEADERSHIP STYLES

Directive

Supportive

Participative

Achievement-oriented

Path-Goal Leadership �Theory and Model

• Motivation is increased by:
• Clarifying the follower’s path to the rewards that are available
• Working with followers to identify and teach them behaviors which will lead to successful task accomplishment and organizational rewards
• Increasing the rewards that are valued and wanted by the followers

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Situational Factors

• Subordinate
• Authoritarianism
• Is the degree to which employees defer to others, and want to be told what to do and how to do the job
• Locus of control
• Is the extent to which employees believe they control goal achievement (internal) or if goal achievement is controlled by others (external)
• Ability
• Is the extent of the employees’ ability to perform tasks to achieve goals

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Situational Factors (cont.)

• Environment
• Task structure
• Is the extent of repetitiveness of the job
• Formal authority
• Is the extent of the leader’s position power
• Work group
• Is the extent to which coworkers contribute to job satisfaction or the relationship between followers

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Leadership Styles

• Directive
• The leader provides high structure
• Is appropriate when:
• The followers want authority leadership
• The followers have external locus of control
• Follower ability is low
• The environmental task is complex or ambiguous
• Formal authority is strong
• The work group provides job satisfaction

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Leadership Styles (cont.)

• Supportive
• The leader provides high consideration
• Is appropriate when:
• The followers do not want authority leadership
• The followers have internal locus of control
• Follower ability is high
• The environmental tasks are simple
• Formal authority is weak
• The work group does not provide job satisfaction

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Leadership Styles (cont.)

• Participative
• The leader includes employee input into decision making
• Is appropriate when:
• Followers want to be involved
• Followers have internal locus of control
• Follower ability is high
• The environmental task is complex
• Authority is either strong or weak
• Job satisfaction from coworkers is either high or low

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Leadership Styles (cont.)

• Achievement-oriented
• The leader provides both high directive (structure) and high supportive (consideration) behavior
• Is appropriate when:
• Followers are open to autocratic leadership
• Followers have external locus of control
• Follower ability is high
• The environmental task is simple
• Authority is strong
• Job satisfaction from coworkers is either high or low

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Hersey and Blanchard’s Situational Leadership Theory (SLT)�

• Argues that successful leadership is achieved by selecting the right leadership style which is contingent on the level of the followers’ readiness.
• Acceptance: leadership effectiveness depends on whether followers accept or reject a leader.
• Readiness: the extent to which followers have the ability and willingness to accomplish a specific task.
• Leaders must relinquish control over and contact with followers as they become more competent.

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SLT Contd….,

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Task Behaviour

R

E

L

A

T

I

O

N

S

H

I

p

LOW

HIGH

HIGH

(cont’d)

• Creates four specific leadership styles incorporating Fiedler’s two leadership dimensions:
• Telling: high task-low relationship leadership
• Selling: high task-high relationship leadership
• Participating: low task-high relationship leadership
• Delegating: low task-low relationship leadership

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(cont’d)

• Posits four stages follower readiness:
• R1: followers are unable and unwilling
• R2: followers are unable but willing
• R3: followers are able but unwilling
• R4: followers are able and willing

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Leader Member Exchange

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Leader Member Exchange Theory (LMX)

• Leadership is a process that is centered on the interactions between leaders and followers.
• LMX makes the dyadic relationship between leaders and followers the focal point of the leadership process.
• Focus is also placed on the differences that might exist between the leader and each of his or her followers – the leader can not treat all the followers the same.

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Leader Member Exchange

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LMX

• Two kinds of relationships that each follower falls into based on how well they work with the leader and how well the leader works with them. Personality and other personal characteristics are also related to this process.
• In groups – based on expanded and negotiated role responsibilities. Followers go far beyond their formal job description, and the leader in turn does more for these followers.
• Out group – based on the formal employment contract. Followers are not interested in taking on new and different job responsibilities.

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Leader Member Exchange

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In-Group

Out-Group

Leader

In-Group

more information, influence, confidence & concern from Leader

more dependable, highly involved & communicative than out-group

​

Out-Group

less compatible with Leader

usually just come to work, do their job & go home

​

LMX

• Researchers found that high quality leader member exchanges produced less employee turnover, more positive performance evaluations, higher frequency of promotions, greater organizational commitment, more desirable work assignments, better job attitudes, more attention and support from the leader, greater participation, and faster career progress over 25 years.
• When leaders and followers have good exchanges, they feel better, accomplish more, and the organization prospers.

​

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Leader Member Exchange

Strengths

• It makes sense by describing work in terms of those who contribute more and those who do the bare minimum.
• Unique because it is the only theory to identify the dyadic relationship. Effective leader member exchanges are important
• Notes the importance of communication in leadership
• Reminds leaders to be fair about who they let into the in group – this is based on work performance not race, sex, ethnicity, religion, etc
• Large amount of research supports this theory

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Leader Member Exchange

Weakness

• On the surface this theory doesn’t seem “fair” because it does not treat everyone equally. Also can support the development of privileged groups in the work place.
• The basic ideas of the theory are not fully developed. Fails to explain how high quality exchanges are created.
• No part of the research uses dyadic measures to analyze the LMX process