Theories and Practices of

Management
 Chapter Four

Directing/Leading Function
 1. What is directing?
• influencing people's behavior through
motivation, communication, group
dynamics, leadership and discipline.

*Purpose: channel the behavior of all

personnel to accomplish the
organization's mission and objectives
while simultaneously helping them
accomplish their own career objectives.
 2. What is Leading?

• Leading (Influencing) means guiding the activities

of the organization members in appropriate
directions. Objective is to improve productivity.
 Leading Cont’d…
Leading…. Leading illustrated
 Getting others to
perform the necessary
tasks by motivating
them to achieve the
organization’s goals

 Crucial element in all

functions
 Leading Cont’d…
• People should be encouraged to develop zeal and
confidence.
• Leaders help a group to attain objectives through the
maximum application of its capabilities
They do not stand behind a group but they inspire the
group.
* A good example is an orchestra leader, whose
function is to produce coordinated sound and correct
tempo through the integrated efforts of the musicians.
Depended on the quality of director’s leadership, the
orchestra will respond.

• is a great quality and it can create and convert anything.

 Leading Cont’d…
Leadership has different meanings by different authors.
E.g. 1. According to KOONTZ AND O'DONNELL
• “… isthe ability to exert interpersonal influence by means of communication, towards the
achievement of a goal. Since managers get things done through people, their success
depends upon their ability to provide leadership".”
• 2. According to ALFORD AND BEATTY
• “…. is the ability to secure desirable actions from a group of followers voluntarily,
without the use of coercion".
3. ACCORDING TO CHESTER I BARNARD
• “… refers to the quality of the behavior of the individual whereby they
guide people on their activities in organized efforts".

4. ACCORDING TO TERRY
• "a leader shows the way by his own example. He is not a pusher, he pulls rather
than pushes".
 Leading Cont’d…
5. ACCORDING TO PETER DRUCKER
“… is not making friends and influencing people i.e., salesmanship. Leadership is the lifting of man's vision to
higher sights, the raising of man's performance to higher standards, the building of man's personality
beyond its normal limitations".

6. ACCORDING TO LOUIS A ALLEN

"A leader is one who guides and directs other people. He gives the efforts to his
followers a direction and purpose by influencing their behavior".

7. ACCORDING TO THEO HAIMANN

"Leadership is the process by which an executive imaginatively directs, guides and influences the work of
others in choosing and attaining specified goals by mediating between the individuals and the organization
in such a manner that both will obtain maximum satisfaction".

• I
 Leading Cont’d…
8. ACCORDING TO KATZ AND KALM

• “… The word leadership is sometimes used to indicate that it is

an attribute of personality; sometimes, it is used as if it were a

characteristic of certain positions, and sometimes as an

attribute of behavior".

Conclusion: leadership is a psychological process of influencing

followers (subordinates) and providing guidance, directing and

leading the people in an organization towards attainment of the

objectives of the enterprise.

 3. INGREDIENTS OF LEADERSHIP

• Every group of people that performs job has same person as its
head who is skilled in art of leadership.
*This skill seems to be a compound of at least four major
ingredients.
1. Power
2. Fundamental understanding of people
3. Ability to inspire follower
4. The ability to act in a manner that will develop a

conducive climate to responding and rousing

motivations
 INGREDIENTS Cont’d…
1. POWER a strong influence on the
direction of an individual’s behavior.

Types of Power
a. LEGITMATE POWER
b. COERECIVE POWER
c. REWARD POWER
d. EXPERT POWER
e. REFERENT POWER
f. DECISION MAKING POWER
 4. Leadership Theories
1. Great Man Theory
Assumptions
• Leaders are born and not made.
• Great leaders will arise when there is a great need.
• Early research on leadership was based on the
study of people who were already great leaders.
 Leadership Theories Cont’d…

Description
• These people were often from the aristocracy
• This contributed to the notion that leadership
had something to do with breeding.
• in times of need, a Great Man would arise,
almost by magic.
 Verification: Referring to people such as Jesus,
Moses, Eisenhower and Churchill,Mohammed
and the Buddah.
 Leadership Theories Cont’d…

• Gender issues were not on the table. Most

leaders were male and the thought of a Great
Woman was generally in areas other than
leadership.
• Most researchers were also male, and
concerns about androcentric bias were a long
way from being realized.
 Leadership Theories Cont’d…

2. Trait Theory
Assumptions
• People are born with inherited traits.
• Some traits are particularly suited to leadership.
• People who make good leaders have the right (or
sufficient) combination of traits.
 Leadership Theories Cont’d…

Stogdill (1974) identified the following traits and skills as critical to leaders
Skills
Traits • Clever (intelligent)
• Adaptable to situations • Conceptually skilled
• Alert to social environment • Creative
• Ambitious and achievement- • Diplomatic and tactful
orientated • Fluent in speaking
• Assertive
• Knowledgeable about group task
• Cooperative
• Decisive
• Dependable
 Leadership Theories Cont’d…

Skills
• Dominant (desire to
Traits
• Organized (administrative
influence others) ability)
• Energetic (high activity • Persuasive
level) • Socially skilled
• Persistent
• Self-confident
• Tolerant of stress
• Willing to assume
responsibility
 Leadership Theories Cont’d…

*McCall and Lombardo (1983) researched

identified four primary traits by which leaders
could succeed or 'derail‘:
• Emotional stability and composure
• Admitting error
• Good interpersonal skills
• Intellectual breadth
 Leadership Theories Cont’d…

• Many different studies of leadership

traits agree only in the general saintly
qualities.
 Leadership Theories Cont’d…
3. Behavioral Theory
Assumptions
• Leaders can be made, rather than are born.
• Successful leadership is based in definable,
learnable behavior.

Description
• They look at what leaders actually do; not what
they are
 Leadership Theories Cont’d…
• It is a big leap from Trait Theory
• opens the floodgates to leadership development
• relatively easy to develop- success Vs actions
• Possible to correlate statistically significant
behaviors with success or failure
 Leadership Theories Cont’d…
4. The Managerial Grid or Leadership Grid
 By Blake and Mouton in the early 1960s.
Description
• Leaders may be concerned for their people
and they must also have some concern for the
work to be done.
• The question is, how much attention do they
pay to one or the other?
 Leadership Theories Cont’d…

Team
High Country Club management
management

Middle of the
Medium road
management
Concern Impoverished Authority-
for People Low management compliance

Low Medium High

Concern for Production

 Leadership Theories Cont’d…

=>
• The model uses the
Task vs. Person preference that appears in
many other studies, such as the
Michigan Leadership Studies and the
Ohio State Leadership Studies.
• They are both clearly important dimensions,
but as other models point out, they are not all
there is to leadership and management.
 Leadership Theories Cont’d…
5. Participative Leadership (also known as consultation,
empowerment, joint decision-making, democratic leadership,
Management By Objective (MBO) and power-sharing)

Assumptions
• Involvement in decision-making improves the
understanding of the issues involved by those who
must carry out the decisions.
• People are more committed to actions where they
have involved in the relevant decision-making.
 Leadership Theories Cont’d…

• People are less competitive and more collaborative

when they are working on joint goals.
• When people make decisions together, the social
commitment to one another is greater and thus
increases their commitment to the decision.
• Several people deciding together make better
decisions than one person alone.
 Leadership Theories Cont’d…

Style
• Participative Leader seeks to involve other
people in the process, possibly including
subordinates, peers, superiors and other
stakeholders.
• However, as it is within the managers' whim
to give or deny control to his or her
subordinates, most participative activity is
within the immediate team.
 Leadership Theories Cont’d…

• The question of how much influence others are given thus

may vary on the manager's preferences and beliefs.

< Not participative Highly participative >

Autocratic Leader Team Joint Full

decision by proposes proposes decision delegation
leader decision, decision, with team of decision
listens to leader has as equals to team
feedback, final
then decision
decides
 Leadership Theories Cont’d…
• Many varieties on this spectrum: E.g.
 stages where the leader sells the idea to the team.
 for the leader to describe the 'what' of objectives/goals and let the
team or individuals decide the 'how' of the process by which the
'how' will be achieved (this is MBO).
 The level of participation may also depend on the type of decision
being made.
E.g. Decisions on how to implement goals may be highly
participative, whilst decisions during subordinate performance
evaluations are more likely to be taken by the manager.
 Leadership Theories Cont’d…
6. Lewin's leadership styles
Description
• Kurt Lewin and his colleagues did leadership decision
experiments in 1939 and identified three different styles
of leadership, in particular around decision-making:
I. Autocratic
II. Democratic
III. Laissez-Faire
 Leadership Theories Cont’d…
I. Autocratic Style
• the leader takes decisions without consulting
with others. In Lewin's experiments, he found
that this caused the most level of discontent.
• works when:
 there is no need for input on the decision,
 the motivation of people to carry out subsequent
actions would not be affected
 Leadership Theories Cont’d…
II. Democratic Style
• The leader involves the people in the decision-making,
although the process for the final decision may vary from
the leader having the final say to them facilitating
consensus in the group.
• Usually appreciated by the people, especially if they have
been used to autocratic decisions with which they
disagreed.
• Problematic when there are a wide range of opinions and
there is no clear way of reaching an equitable final
decision.
 Leadership Theories Cont’d…
III. Laissez-Faire
• minimizes the leader's involvement in decision-
making -> allowing people to make their own
decisions, although they may still be responsible
for the outcome.
• works best when people are capable and
motivated in making their own decisions, and
where there is no requirement for a central
coordination, for example in sharing resources
across a range of different people and groups.
 Leadership Theories Cont’d…
=>
• He discovered:
 the most effective style to be Democratic
Excessive autocratic styles led to revolution
 Laissez-faire approach, people were not coherent in
their work and did not put in the energy that they did
when being actively led.
• These experiments were early in the modern era and
were consequently highly influential.
 Leadership Theories Cont’d…
6. Likert's leadership styles
Description
• Rensis Likert identified four main styles of leadership, in
particular around decision-making and the degree to which
people are involved in the decision:
I. Exploitive Authoritative Style
II. Benevolent Authoritative Style
III. Consultative Style
IV. Participative Style
 Leadership Theories Cont’d…
I. Exploitive Authoritative Style
• the leader has a low concern for people and uses such
methods as threats and other fear-based methods to
achieve conformance.
• Communication is almost entirely downwards and the
psychologically distant concerns of people are ignored.
II. Benevolent authoritative Style
• the leader adds concern for people to an authoritative
position, a 'benevolent dictatorship' is formed.
 Leadership Theories Cont’d…
• The leader now uses rewards to encourage
appropriate performance and listens more to
concerns lower down the organization, although
what they hear is often rose-tinted, being limited
to what their subordinates think that the boss
wants to hear.
• Although there may be some delegation of
decisions, almost all major decisions are still made
centrally.
 Leadership Theories Cont’d…
III. Consultative Style
• The upward flow of information here is still
cautious and rose-tinted to some degree,
although the leader is making genuine efforts
to listen carefully to ideas.
• Nevertheless, major decisions are still largely
centrally made.
 Leadership Theories Cont’d…

IV. Participative Style

• the leader makes maximum use of participative
methods, engaging people lower down the
organization in decision-making.
• People across the organization are psychologically
closer together and work well together at all
levels.
 Leadership Theories Cont’d…
7. Situational Leadership theory
Assumptions
• The best action of the leader depends on a
range of situational factors.
Style
• To decide, an effective leader does not just fall
into a single preferred style.
Leadership Theories Cont’d…
 Leadership Theories Cont’d…

*Yukl (1989) seeks to combine other approaches

and identifies six variables:
• Subordinate effort: the motivation and actual effort expended.
• Subordinates ability and role clarity: Their knowledge on what to
do and how to do it.
• Organization of the work: structure of work and utiliz’n of
resources.
• Cooperation and cohesiveness: of the group in working together.
• Resources and support: the availability of tools, materials, people,
etc
• External coordination: the need to collaborate with other groups.
 Leadership Theories Cont’d…
Discussion
• Tannenbaum and Schmidt (1958) identified three
forces that led to the leader's action:
 the forces in the situation,
 the forces in then follower leader's style is highly variable
 forces in the leader.
• Maier (1963) noted that leaders not only consider the
likelihood of a follower accepting a suggestion, but
also the overall importance of getting things done.
In critical situations, a leader is more likely to be
directive in style simply because of the implications of
failure.
 Leadership Theories Cont’d…
5. Path-Goal Theory of Leadership

Assumption:
• there is one right way of achieving a goal and that
the leader can see it and the follower cannot.
• This casts the leader as the knowing person and the
follower as dependent.
• the follower is completely rational and that the
appropriate methods can be deterministically
selected depending on the situation.
 Leadership Theories Cont’d…
Descriptions:
• developed to describe the way that leaders encourage
and support their followers by:
 Clarifying the path so subordinates know which way to
go.
 Removing roadblocks that are stopping them going
there.
 Increasing the rewards along the route.
**But Leaders can take a strong or limited approach in
these regards + it depends on the situation
 Leadership Theories Cont’d…
• House and Mitchell (1974) describe four styles of
leadership:
a. Supportive leadership-
 Considers the needs of the follower- concern for welfare, creating a
friendly working environment, increasing the follower's self-esteem
and making the job more interesting.
 best when the work is stressful, boring or hazardous.
b. Directive leadership
 Telling followers what need to be done & giving guidance along the way.
 Rewards may also be increased as needed and role ambiguity decreased
 may be used when the task is unstructured and complex and the
follower is inexperienced.
 Leadership Theories Cont’d…
c. Participative leadership
 Consulting with followers & taking their ideas into account
to decisions & take particular actions.
 best when the followers are expert and their advice is both
needed and they expect to be able to give it.
d. Achievement-oriented leadership
 Setting challenging goals, both in work and in self-
improvement (and often together) & High standards are
demonstrated and expected.
 leader shows faith in the capabilities of the follower to
succeed.
 best when the task is complex.
 Leadership Theories Cont’d…
• Leaders who show the way and help followers
along a path are effectively 'leading'.
 Leadership Theories Cont’d…
8. Contingency Theory
Assumptions
• leader's ability to lead is contingent upon
various situational factors: leader's preferred
style, the capabilities & behaviors of followers
and other situational factors.
 Leadership Theories Cont’d…
Description
• are a class of behavioral theory
• no one best way of leading ; a leadership style
effective in some situations may not be successful in
others.
• leaders who are effective at one place and time may
become unsuccessful either when transplanted or
when factors change.
• This helps to explain how some leaders who seem for a
while to have the 'Midas touch' suddenly appear to go
off the boil and make very unsuccessful decisions.
 Leadership Theories Cont’d…
Discussion
• similar to situational theory in that there is an
assumption of no simple one right way.
Difference:
• situational theory tends to focus more on the
behaviors that the leader should adopt, given
situational factors (often about follower behavior),
whereas
• contingency theory takes a broader view that includes
contingent factors about leader capability and other
variables within the situation.
 Leadership Theories Cont’d…
8.1. Fiedler's Least Preferred Co-worker (LPC) Theory

Assumptions
• Leaders prioritize between task-focus and
people-focus.
• Relationships, power and task structure are
the three key factors that drive effective
styles.
 Leadership Theories Cont’d…
Description
• Fiedler identified the a Least Preferred Co-
Worker scoring for leaders by asking them first to
think of a person with which they worked that
they would like least to work with again, and
then to score the person on a range of scales
between positive factors (friendly, helpful,
cheerful, etc.) and negative factors (unfriendly,
unhelpful, gloomy, etc.). A high LPC leader
generally scores the other person as positive and
a low LPC leader scores them as negative.
 Leadership Theories Cont’d…
• High LPC leaders tend to have close and positive relationships and act in a supportive
way, even prioritizing the relationship before the task. Low LPC leaders put the task
first and will turn to relationships only when they are satisfied with how the work is
going.
• Three factors are then identified about the leader, member and the task:
 Leader-Member Relations: The extent to which the leader has the support and
loyalties of followers and relations with them are friendly and cooperative.
 Task structure: The extent to which tasks are standardized, documented and
controlled.
 Leader's Position-power: The extent to which the leader has authority to assess
follower performance and give reward or punishment .
 Leadership Theories Cont’d…
• Generally, a high LPC approach is best when
leader-member relations are poor, except
when the task is unstructured and the leader
is weak, in which a low LPC style is better.
 Leadership Theories Cont’d…
Leader's Most
Leader-Member
# Task structure Position- Effective
Relations
power leader
1
Structured Strong Low LPC
Good
2 Good Structured Weak Low LPC
3 Good Unstructured Strong Low LPC
4
Good Unstructured Weak High LPC

5 Poor Structured Strong High LPC

6 Poor Structured Weak High LPC
7 Poor Unstructured Strong High LPC
8 Poor Unstructured Weak Low LPC
 Leadership Theories Cont’d…

Discussion
• This approach seeks to identify the underlying
beliefs about people, in particular whether the leader sees
others as positive (high LPC) or negative (low LPC). The
neat trick of the model is to take someone where it would
be very easy to be negative about them.
• This is another approach that uses task- vs. people-focus
as a major categorization of the leader's style.
See also
• Ohio State Leadership Studies, Michigan Leadership Studies
• Beliefs about people, Attribution Theory, Leader-Member Exchange Theory
 Leadership Theories Cont’d…

8.2. Cognitive Resource Theory

Assumptions
• Intelligence and experience and other cognitive
resources are factors in leadership success
• Cognitive capabilities, although significant are
not enough to predict leadership success
• Stress impacts the ability to make decisions
Description
Cognitive Resource Theory predicts that:
1. A leader's cognitive ability contributes to the performance
of the team only when the leader's approach is directive.
2. Stress affects the relationship between intelligence and
decision quality.
3. Experience is positively related to decision quality under
high stress.
4. For simple tasks, leader intelligence & experience is
irrelevant.
Discussion
• CRT arose out of dissatisfaction with Trait Theory.
• Fiedler also linked CRT with his
Least Preferred Co-worker (LPC) Theory, suggesting that
high LPC scores are the main drivers of directive
behavior.
• A particularly significant aspect of CRT is the principle
that intelligence is the main factor in low-stress
situations, whilst experience counts for more during
high-stress moments.
8.2. Strategic Contingencies Theory

Description
• Intra-organizational power depends on three
factors:
i. problem skills,
ii. actor centrality and
iii.uniqueness of skill.
i. If you have the skills and expertise to resolve important
problems, then you are going to be in demand
 Securing high negotiation by the law of ss and dd
 Getting power from the reciprocity created.
ii. If you work in a central part of the workflow of the
organization, then what you do is very important.
 Giving you many opportunities to be noticed.
 you are on the critical path
 creating attention and giving you bargaining power.
 Leadership Theories Cont’d…

iii. if you are difficult to replace, then if you do

make enemies up the hierarchy, then they
cannot just move you out or sideways.
 Leadership Theories Cont’d…

Example
• A production manager in an organization is:
i. in charge of a key manufacturing operation
(centrality),
ii. understands its complexities very well (uniqueness).
iii.From experience, when things go wrong, s/he is very
good at fixing things, both mechanically and with the
unions.
 Leadership Theories Cont’d…

So what?
1. Using it
 Get a job on the critical path
 Become expert in problem solving in it
 Acquire and defend knowledge and skills that nobody
else has.
2. Defending
 Do not let any one person become indispensable.
See also: Power
 Leadership Theories Cont’d…

9. Transactional Leadership

Assumptions
• People are motivated by reward and punishment.
• Social systems work best with a clear chain of
command.
• When people have agreed to do a job, a part of the
deal is that they cede all authority to their manager.
• The prime purpose of a subordinate is to do what their
manager tells them to do.
 Leadership Theories Cont’d…

Style
• The transactional leader works through creating clear
structures
 clear responsibility of their subordinates
 the rewards that they get for following orders
 Punishments are not always mentioned, but they are
also well-understood and formal systems of discipline
are usually in place.
• At early stage of this Leadership,
 negotiating the contract
 the subordinate is given a salary & other benefits
 the company and/or the manager gets authority
over the subordinate.
• When the Transactional Leader allocates work
to subordinates,
 they are considered to be fully responsible for it,
whether or not they have the resources or
capability to carry it out.
E.g. Things go wrong-> subordinate’s fault->
punishment or the otherwise for success
• The transactional leader often uses
management by exception:
 if something is operating to defined and expected
performance
No need of attention
 for Performance exceeding expectation

praise and reward,

 for performance below expectation
corrective action
• Transactional Leadership, once the contract is in
place, takes a 'telling' style, whereas
Transformational Leadership has more of a 'selling'
style
Discussion
• Transactional leadership is based in contingency
-> reward or punishment is contingent upon
performance.
• Despite its limitations, Transactional Leadership is
still a popular approach.
• Indeed, in the Leadership vs. Management spectrum,
it is very much towards the management end of the
scale.
 Its limitation
• It is with the assumption of 'rational man‘:
 a person who is largely motivated by money and simple
reward, and hence whose behavior is predictable.
 The underlying psychology is Behaviorism, including the
Classical Conditioning of Pavlov and Skinner's Operant
Conditioning theories which are largely based on
controlled laboratory experiments (often with animals)
and ignore complex emotional factors and social values.
• In practice, there is sufficient truth in Behaviorism to
sustain Transactional approaches.
E.g. i. the supply-and-demand situation of much
employment, coupled with the effects of deeper needs, as
in Maslow's Hierarchy.
ii. But when the demand for a skill outstrips the supply, then
Transactional Leadership often is insufficient.

See also
Exchange principle, Transformational Leadership
9.1. Leader-Member Exchange (LMX) Theory
( also called LMX or Vertical Dyad Linkage Theory)

Description
• describes how leaders in groups maintain
their position through a series of tacit
exchange agreements with their members.
In-group and out-group
• Leaders often have a special relationship with
an inner circle of trusted lieutenants,
assistants and advisors, to whom they give
high levels of responsibility, decision
influence, and access to resources.
 This in-group pay for their position.
They work harder, more committed to task
objectives, and share more administrative duties.
They are expected to be fully committed and loyal
to their leader.
• The out-group, on the other hand, are given low
levels of choice or influence.
• This also puts constraints upon the leader. They
have to nurture the relationship with their inner
circle whilst balancing giving them power with
ensuring they do not have enough to strike out on
The LMX process
• These relationships, if they are going to happen, start
very soon after a person joins the group and follow
three stages.
1. Role taking
• The member joins the team and the leader assesses
their abilities and talents. Based on this, the leader
may offer them opportunities to demonstrate their
capabilities.
• And the discovery by both parties of how the other
likes to be respected.
2. Role making
• the leader and member take part in an unstructured
and informal negotiation whereby a role is created
for the member and the often-tacit promise of
benefit and power in return for dedication and
loyalty takes place.
• Trust-building is very important, and any felt
betrayal, esp. by the leader, can relegate a member
to the out-group.
• This negotiation includes relationship factors & pure
work-related ones, and a member who is similar to
the leader is more likely to succeed.
 This perhaps explains why mixed gender
relationships regularly are less successful than same-
gender ones (it also affects the seeking of respect in
the first stage).
 The same effect also applies to cultural and racial
differences.
3. Routinization
• A pattern of ongoing social exchange between the
leader and the member becomes established.

Success factors
• Successful members are thus similar in many ways to
the leader
perhaps that is why many senior teams are all
white, male, middle-class and middle-aged). They
work hard at building and sustaining trust and
respect.
To help this, they are empathetic, patient,
reasonable, sensitive, and are good at seeing the
viewpoint of other people (esp.the leader).
Aggression, sarcasm and an egocentric view are keys
to the out-group wash-room.
The overall quality of the LMX relationship varies with
several factors.
it is better when the challenge of the job is extremely high
or extremely low.
  Size of the group, financial resource availability and
the overall workload are also important.

Downwards and upwards

• The principle works upwards as well.
 The leader gains power by being a member of their
manager's inner circle, which then can share on
downwards. People at the bottom of an organization
with unusual power may get it from an unbroken
chain of circles up to the hierarchy.
 So what?
1. Using it
When you join a team, as a member,
 work hard to also join the inner circle.
 Take on more than your share of administrative and
other tasks.
 Demonstrate unswerving loyalty.
 See your leader's point of view.
 Be reasonable and supportive in your challenges to
them, and pick your moments carefully.
As a leader
 pick your inner circle with care.

 Reward them for their loyalty and hard work, whilst

being careful about maintaining commitment of
other people.
2. Defending
If you want to be an 'ordinary' member of a team,
play your part carefully. There will be others with
more power.
If you want to lead an equal team, beware of those
who curry favor.
See also
Power, Social Exchange Theory
 ..
10. Transformational Leadership
Assumptions
• People will follow a person who inspires them.
• A person with vision and passion can achieve great
things.
• The way to get things done is by injecting enthusiasm
and energy.
 ..

Style
• Working for a Transformational Leader can be a
wonderful and uplifting experience.
 They put passion and energy into everything.

 They care about you and want you to succeed.

Developing the vision
• Transformational Leadership starts with the
development of a vision, a view of the future that will
excite and convert potential followers.
• This vision may be developed by the leader, by the
senior team or may emerge from a broad series of
discussions.
The important factor is the leader buys into it,
hook, line and sinker.
Selling the vision
• The next step, which in fact never stops, is to
constantly sell the vision.
 This takes energy and commitment, as few people
will immediately buy into a radical vision, and some
will join the show much more slowly than others.
 The Transformational Leader thus takes every
opportunity and will use whatever works to convince
others to climb on board the bandwagon.
• In order to create followers, the Transformational
Leader has to be very careful in creating trust, and
their personal integrity is a critical part of the
package that they are selling.
In effect, they are selling themselves as well
as the vision.
Finding the way forwards
• In parallel with the selling activity is seeking the way
forward.
Some Transformational Leaders know the way,
and simply want others to follow them.
 Others do not have a ready strategy, but will
happily lead the exploration of possible routes to
the promised land.
• The route forwards may not be obvious and may not
be plotted in details, but with a clear vision, the
direction will always be known.
 Thus finding the way forward can be an ongoing
process of course correction, and
 Transformational Leader will accept that there will
be failures and blind canyons along the way.
 As long as they feel progress is being made, they will
be happy.
Leading the charge
• The final stage is to remain up-front and central
during the action.
 Transformational Leaders are always visible and will
stand up to be counted rather than hide behind their
troops.
 They show by their attitudes and actions how
everyone else should behave.
 They also make continued efforts to motivate and
rally their followers, constantly doing the rounds,
listening, soothing and enthusing.
• It is their unswerving commitment as much as
anything else that keeps people going, particularly
through the darker times when some may question
whether the vision can ever be achieved.
 If the people do not believe that they can succeed,
then their efforts will flag.
 The Transformational Leader seeks to infect and re-
infect their followers with a high level of
commitment to the vision.
• One of the methods the Transformational Leader uses to
sustain motivation is in the use of ceremonies, rituals
and other cultural symbolism.
 Small changes get big hurrahs, pumping up their
significance as indicators of real progress.
• Overall, they balance their attention between action that
creates progress and the mental state of their followers.
• Perhaps more than other approaches, they are
people-oriented and believe that success comes first
and last through deep and sustained commitment.
Discussion
• Whilst the Transformational Leader seeks overtly to
transform the organization, there is also a tacit
promise to followers that they also will be
transformed in some way, perhaps to be more like
this amazing leader. In some respects, then, the
followers are the product of the transformation.
• Transformational Leaders are often charismatic, but
are not as narcissistic as pure Charismatic Leaders,
who succeed through a belief in themselves rather
than a belief in others.
• One of the traps of Transformational Leadership is
that passion and confidence can easily be mistaken
for truth and reality.
• Whilst it is true that great things have been achieved
through enthusiastic leadership, it is also true that
many passionate people have led the charge right
over the cliff and into a bottomless chasm. Just
because someone believes they are right, it does not
mean they are right.
• Paradoxically, the energy that gets people going can
also cause them to give up.
 Transformational Leaders often have large amounts of
enthusiasm which, if relentlessly applied, can wear out
their followers.

• Transformational Leaders also tend to see the big picture,

but not the details, where the devil often lurks. If they do
not have people to take care of this level of information,
then they are usually doomed to fail.
• Finally, Transformational Leaders, by definition, seek
to transform. When the organization does not need
transforming and people are happy as they are, then
such a leader will be frustrated. Like wartime
leaders, however, given the right situation they come
into their own and can be personally responsible for
saving entire companies.
10.1. Burns' Transformational Leadership Theory

Assumptions
• Association with a higher moral position is motivating and
will result in people following a leader who promotes this.
• Working collaboratively is better than working
individually.
Description
• Burns defined transformational leadership as a process
where leaders and followers engage in a mutual process of
'raising one another to higher levels of morality and
motivation.‘
• Transformational leaders raise the bar by appealing to higher
ideals and values of followers. In doing so, they may model
the values themselves and use charismatic methods to attract
people to the values and to the leader.
• His view is that:
 Transformational leadership is more effective than
transactional leadership, where the appeal is to more
selfish concerns.
 An appeal to social values thus encourages people to
collaborate, rather than working as individuals (and
potentially competitively with one another).
 Transformational leadership as an ongoing process
rather than the discrete exchanges of the transactional
approach.
 Leadership Theories Cont’d…

10.2. Bass' Transformational Leadership Theory

Assumptions
• Awareness of task importance motivates people.
• A focus on the team or organization produces better work.
Description
• Bass defined transformational leadership in terms of how
the leader affects followers, who are intended to trust,
admire and respect the transformational leader.
 Leadership Theories Cont’d…

• He identified three ways in which leaders transform followers:

Increasing their awareness of task importance and value.

Getting them to focus first on team or organizational goals,

rather than their own interests.
Activating their higher-order needs.
 Leadership Theories Cont’d…

• Charisma is seen as necessary, but not sufficient, for

example in the way that charismatic movie stars may not
make good leaders.
• Two key charismatic effects that transformational leaders
achieve are :
 to evoke strong emotions and

 to cause identification of the followers with the leader.

 This may occur through:
 stirring appeals,

 quieter methods such as coaching and mentoring.

• Bass has recently noted that authentic
transformational leadership is grounded in moral
foundations that are based on four components:
Idealized influence
Inspirational motivation
Intellectual stimulation
Individualized consideration
...and three moral aspects:
 The moral character of the leader.
 The ethical values embedded in the leader’s vision,
articulation, and program (which followers either
embrace or reject).
 The morality of the processes of social ethical choice
and action that leaders and followers engage in and
collectively pursue.
• This is in contrast with pseudo-transformational leadership,
where, for example, in-group/out-group 'us and them'
games are used to bond followers to the leader.

Discussion
• In contrast to Burns, who sees transformational
leadership as being inextricably linked with higher
order values, Bass sees it as amoral, and attributed
transformational skills to people such as Adolf Hitler
and Jim Jones.
10.3. The Leadership Challenge
• James Kouzes and Barry Posner developed a survey (The
Leadership Practices Inventory) that asked people which,
of a list of common characteristics of leaders, were, in
their experiences of being led by others, the seven top
things they look for, admire and would willingly follow.
• Over 20 years, they managed to ask 75,000 people.
1. Honest
The results of the study showed that people preferred the following characteristics, in order:
11. Cooperative
2. Forward-looking 12. Determined
3. Competent 13. Imaginative
4. Inspiring 14. Ambitious
5. Intelligent 15. Courageous
6. Fair-minded 16. Caring
7. Broad-minded 17. Mature
8. Supportive 18. Loyal
9. Straightforward 19. Self-controlled
10. Dependable 20. Independent
• The main part of the book discusses the five actions that
Kouzes and Posner identify as being key for successful
leadership:
1. Model the way
 Going first, living the behaviors you want others to adopt.

leading from the front.

People will believe not what they hear leaders say
but what they see leader consistently do.
2. Inspire a shared vision
 People are motivated most not by fear or reward, but by
ideas that capture their imagination.

Note: This is not so much about having a vision, but

communicating it so effectively that others take it as their
own.
3. Challenge the process
 Leaders thrive on & learn from adversity & difficult
situations Early adopters of innovation.

4. Enable others to act

 Encouragement and exhortation are not enough.

People must feel able to act and then must have the
ability to put their ideas into action.
5. Encourage the heart
 People act best of all when they are passionate about
what they are doing.
 Leaders unleash the enthusiasm of their followers this
with stories and passions of their own.
• In general
 it is difficult to ignore the combined views of 75,000 people.

 The placing of honesty first is notable and highlights the

importance of telling the truth to those they would lead.
 The overall process identified is clearly transformational
in style, which again has a strong focus on followers.
 Chapter Four. Motivation
1. Definition and Concepts of Motivation
• The term ‘motivation’ has its origin in the Latin word
“mover” which means to “move”. Movement
• One can get a donkey to move by using a “carrot or a
stick” ; people with incentives, or threats or reprimands.
 However, these only have a limited effect.
 These work for a while and then need to be repeated,
increased or reinforced to secure further movement.
• The term motivation is defined in numerous ways: E.g.
---as “the managerial function of ascertaining the
motives of subordinates and helping them to realize
those motives”.
---the main reason(s) that individuals partake in a
certain behavior.
---the driving force that initiates and drives an
individual's behavior.
---an inner state that activates, energizes or moves
behavior towards goals.
 ---the way a person is enthused at work to intensify his/her
desire and willingness to use and channelize his/her energy
for the achievement of organizational objectives.
 --- is sth that moves a person into action wand
continue him in the course of action enthusiastically.
 ---- its role is to develop and intensify the desire in
every member of an organization to work effectively
and efficiently in his/her position
• According to Dalton E. McFarland, Motivation
 is the way in which urges, desires, aspiration, striving or needs
direct, control or explain the behavior of human being”.

 explains how and way the human behavior is caused.

 is a form of tension occurring within individual, with

resulting behavior aimed at reducing, eliminating or
diverting the tension.
• According to Rensis Likert,
 Motivation is the “core of management.”
 function performed by manager for actuating the
people to work for the accomplishment of
organizational objectives.
 Issuance of well-conceived instructions and orders does
not mean that they will be followed.
 A manager has to make appropriate use of various techniques
of motivation to enthuse the employees to follow them.
 Effective motivation succeeds not only in having an
order accepted but also in gaining a determination to
see that it is executed efficiently and effectively.
 Motivation is an effective and dynamic instrument in the
hands of a manager for inspiring & creating confidence of
workforce.
 Through it , management creates ‘will to work’
 Motivation is the process of getting the members or the group
to pull weight effectively, to give their loyalty to the group &
to carry out properly the purpose of the organization.
• Motivation is Process that accounts for an individual’s
intensity, direction, and persistence of effort toward attaining
a goal
•
Motivation It is the internal energy that propels us
to achieve our goals.

• There are three aspects of human behavior that

motivation is based and founded in:
1. Arousal of behavior
2. Direction of behavior
3. Persistence of behavior
1. Arousal of behavior relates to a specific thing
that activates behavior .
2. Direction of behavior relates to what is
responsible for directing the behavior.
3. Persistence of behavior relates to how the
behavior is sustained.
• What drives an individual to be successful is referred to as
motive.
• Usually, all motives fall into one of three categories and are
considered to be physiological or psychological in nature:
 homeostatic motives - hunger, respiration, thirst, etc.
 Non-homeostatic motives - curiosity about the
environment, seeking shelter, etc.
 learned or social motives - achievement, approval, power,
social affiliation, etc
• Motivation can also be classified as
1. negative or positive
2. obvious or subtle
3. intangible or tangible
• Self-motivation can also be classified into 2 d/t types:
1. Extrinsic - generated by external factors
2. Intrinsic - generated by internal sensations and is
longer-lasting than extrinsic
• Self-motivation is considered to be intrinsic in nature,
and originates from an individual's internal drives. It is
the basis for overcoming obstacles in the path of
achieving one's goals.
• Also, certain external factors are responsible for driving
a person into undertaking a new project or to move in
a positive direction.
• Self-motivation is comprised of 3 factors:
1. beliefs
2. desires
3. values
 In Summary
 Understanding the needs and drives and their resulting tensions
helps to explain and predict human behavior ultimately
providing a sound basis for managerial decision and action.
 In any endeavor that an individual undertakes, motivation
is the key element behind the success or failure of the
endeavor.
 It plays a key role in the workplace where the effective
performance of an employee is concerned.
 Management or supervisory personnel/staff (LEADERs)
have a direct impact and play a significant role in
employee motivation --- to raise productivity levels.
 It also has a direct effect on the cooperation levels
between the employer and the employee.
 Motivation is a process that starts with a
physiological or psychological need that activates a
behavior or a drive that is aimed at a goal.
 Every employee is expected to show increased and
qualitative productivity by the manager.
 To achieve this the behavior of the employee is very
important.
 The behavior of the employees is influenced by the
environment in which they find themselves.
 Finally, an employee's behavior will be a function their
innate drives/felt needs and the opportunities he/she
has to satisfy those drives or needs in the workplace
 Behavior on the Job is Determined by :

1. Needs the individual brings to the job

2. The situation out side the person

3. Opportunities for satisfying needs

 Dimensions of Performance

Motivation

Performance

Ability Opportunity
 Features of motivation
 Motivation is an act of managers
 Motivation is a continuous process
 Motivation can be positive or negative
 Motivation is goal oriented
 Motivation is complex in nature
 Motivation is an art
 Motivation is system-oriented
 Motivation is different from job satisfaction
2. MOTIVATIONAL FACTORS
• There are several factors that motivate a person to work.
• Motivational factors can be broadly divided into two
groups:
I. MONETARY FACTORS:
 Salaries or wages
 Bonus
 Incentives E.g.Medical allowance,
 Special individual incentives
 II. NON MONETARY FACTORS
 Status or job title- higher designations
 Appreciation and recognition
 Delegation of authority
 Working conditions
 Job security
 Job enrichment- more challenging tasks and
responsibilities
 Workers participation- E.g. Inviting for a committee
membership
Cordial relations
Good superiors- intelligent, experienced,
matured, and having a good personality,
superior knowledge and skills
 Providing training to the employees
 Proper job placements
Proper promotions and transfers
Proper performance feed back
 Proper welfare facilities
 Flexible working hours
3. Importance of motivation
Motivation offers several importance to he organization
and to the employees:
 Higher efficiency  Good relations.
 Reduce absenteeism.  Improved morale.
 Reduces employee turn  Reduced wastages &
over. breakages.
 Improves a corporate  Reduced accidents.
image.  Facilitates initiative and
innovation.
 Money as a motivator
• It is believed that money acts as a motivator.
• Its role of motivation depends upon certain factors:
 Relationship between reward & effort.
 Economic conditions of people.
 Level of employees- Lower Vs Higher/executive
 Fairness and equity of the pay- not amount
 Social attitudes towards money and wealth
 4. Motivational Theories

4.1. Maslow’s-Hierarchy of Needs Theory

Assumption:
• people are motivated by a series of 5 universal needs.
• These needs are ranked, according to the order in
which they influence human behavior, in hierarchical
fashion
1. Physiological needs
• are deemed to be the lowest- level needs
E.g. need for food & water food & water
 Unsatisfied physiological needs Existence of a
driving/motivating force
E.g. A hungry person has a felt need sets up
both psychological and physical tension manifest
themselves in overt behaviors directed at reducing
those tensions (getting something to eat) Once
the hunger sated tension reduced the need for
food ceases to motivate.
• At this point (assuming that other physiological
requirements are also satisfied) the next higher order
need becomes the motivating need.
2. Thus, safety needs:- the needs for shelter and security
become the motivators of human behavior.
 include a desire for security, stability, dependency,
protection, freedom from fear and anxiety, and a need for
structure, order, and law..
 In the workplace, these needs translates into a need for
at least a minimal degree of employment security; the
knowledge that we cannot be fired on a whim and that
appropriate levels of effort and productivity will ensure
continued employment.
3. Social needs: include the need for belongingness and love.
 As gregarious creatures, human have a need to belong.
 In the workplace, this need may be satisfied by an ability
to interact with one's coworkers; to be able to work
collaboratively with these colleagues; etc.
4. Ego and esteem needs
 include the desire for self-respect, self-esteem, and the
esteem of others.
 Externally, these needs also include the desire for
reputation, prestige, status, fame, glory, dominance,
recognition, attention, importance, and appreciation.
5. Self-actualization
 the need for self-realization, continuous self-
development, and the process of becoming all that a
person is capable of becoming.
4.2. Alderfer's Hierarchy of Motivational Needs
 Clayton Alderfer reworked Maslow's Need Hierarchy to
align it more closely with empirical research.
 Alderfer's theory is called the ERG theory --- Existence,
Relatedness, and Growth.
 Existence- our concern with basic material existence
requirements
what Maslow called physiological and safety needs.
 Relatedness -> the desire we have for maintaining
interpersonal relationships
similar to Maslow's social/love need, and the
external component of his esteem need.

 Growth-> an intrinsic desire for personal development

the intrinsic component of Maslow's esteem
need, and self-actualization

•
 Alderfer's ERG theory differs from Maslow's Need Hierarchy
insofar as ERG theory demonstrates that more than one
need may be operative at the same time.
 ERG theory does not assume a rigid hierarchy where a lower
need must be substantially satisfied before one can move on.
 Alderfer also deals with frustration-regression.
 if a higher-order need is frustrated, an individual then seeks
to increase the satisfaction of a lower-order need.
• According to Maslow, an individual would stay at a
certain need level until that need was satisfied.
Vs
• ERG theory counters by noting that when a higher-
order need level is frustrated the individual’s desire to
increase a lower- level need takes place.
E.g. Inability to satisfy a need for social interaction
might the desire for more money or better working
conditions frustration can lead to a regression to a
lower need.
 summary
• ERG theory argues, like Maslow, that
 satisfied lower- order needs lead to the desire to satisfy
higher-order needs; but multiple needs can be operating
as motivators at the same time, and frustration in
attempting to satisfy a higher- level need can result in
regression to a lower- level need.
• Look at the ff Alderfer's Hierarchy of Motivational Needs
Level of Definition Properties
Need

Satisfied through using

Impel a person to make
capabilities in engaging problems;
creative or productive
Growth creates a greater sense of
effects on himself and his
wholeness and fullness as a
environment
human being
Satisfied by mutually sharing
thoughts and feelings;
Related Involve relationships with
acceptance, confirmation, under-
ness significant others
standing, and influence are
elements
Includes all of the various When divided among people one
Existen
 A Reorganization of Maslow's and Alderfer's Hierarchies
Level Introversion Extroversion
Transcendence (assisting in
Self-Actualization (dev’t of
the dev’t of others'
competencies[knowledge,atti
Growth competencies and character;
tudes, and skills] and
r/nships to the unknown,
character)
unknowable)
Other Personal identification with
Value of person by group
(Relate group, significant others
(Esteem)
dness) (Belongingness)
Self Physiological, biological
(Existe (including basic emotional Connectedness, security
nce) needs)
4.3. Two-factor Theory
• Herzberg's Two Factor Theory, also known as the
Motivation-Hygiene Theory
• was derived from a study designed to test the concept
that people have two sets of needs:
1. their needs as animals to avoid pain
2. their needs as humans to grow psychologically

Herzberg’ study
• Herzberg's study consisted of a series of interviews that
sought to elicit responses to the questions:
(1) Recall a time when you felt exceptionally good about your
job.
 Why did you feel that way about the job?
 Did this feeling affect your job performance in any way?
 Did this feeling have an impact on your personal
relationships or your well- being?
(2) Recall a time on the job that resulted in negative feelings
 Describe the sequence of events that resulted in these
negative feelings.
•
 Research Results
• the things making people happy on the job and those
making them unhappy had two separate themes:
1)SATISFACTION (MOTIVATION)
 Five factors stood out as strong determiners of job
satisfaction:
 achievement
 recognition
 work itself
 responsibility
 advancement
• The last three factors were found to be most important
for bringing about lasting changes of attitude.
• It should be noted, that recognition refers to
recognition for achievement as opposed to recognition
in the human relations sense.

2. DISSATISFACTION (HYGIENE)
 The determinants of job dissatisfaction were found to be:
 company policy
 administrative policies
 supervision
 Salary
 Interpersonal relations
 Working conditions
 Herzberg’s conclusion
• the replies people gave when they felt good about their
jobs were significantly different from the replies given
when they felt bad.
• Certain characteristics tend to be consistently related to
job satisfaction and others to job dissatisfaction.
• Intrinsic factors: work itself , responsibility and
achievement seem to be related to job satisfaction.
Respondents who felt good about their work
tended to attribute these factors to themselves.
• On the other, dissatisfied respondents tended to cite
extrinsic factors such as supervision, pay, company
policies and working condition.
 Herzberg proposed that his findings indicated the
existence of a dual continuum:
 the opposite of “satisfaction” is “ No satisfaction”
 the opposite of “Dissatisfaction” is “No Dissatisfaction”.
• According to Herzberg, the factors leading to Job
satisfaction are separate and distinct from those that lead to
job dissatisfaction.
 Therefore, managers who seek to eliminate factors that can
create job dissatisfaction may bring about peace but not
necessarily motivation
They will be placating their workforce rather than
motivating them.
•
 As a result, conditions surrounding the job such as
quality of supervision, pay , company policies, physical
working conditions relations with others and job
security were characterized as hygiene factors
when they’re adequate, people will not be
dissatisfied ;neither will they be satisfied.
 If we want to motivate people on their jobs, Herzberg
suggested emphasizing factors associated with the
work itself or to outcomes directly derived from it;
such as :
promotional opportunities, opportunities for personal
growth, recognition, responsibility & achievement.
These are the characteristics that people find
intrinsically rewarding.

Employees not Positive satisfaction

Dissatisfaction &
dissatisfied; but & Motivation
Demotivation not motivated

Hygiene Motivator
Factors Factors
4.4. Expectancy Theory (also known as the Valence-
Instrumentality- Expectancy Theory)
• In recent years, probably the most popular
• all have their roots in Victor Vroom's 1964 work on motivation

ALTERNATIVES AND CHOICES

• Vroom's theory assumes that behavior results from
conscious choices among alternatives whose purpose is
to maximize pleasure and minimize pain.
• The key elements to this theory :
 Expectancy (E), Instrumentality (I), and Valence (V).
• Critical to the understanding of the theory is the
understanding that each of these factors represents a
belief.
• Vroom's theory suggests that the individual will consider
the outcomes associated with various levels of
performance (from an entire spectrum of performance
possibilities), and elect to pursue the level that
generates the greatest reward for him or her.

i. Expectancy: "What's the probability that, if I work very

hard, I'll be able to do a good job?"
• Expectancy refers to the strength of a person's belief
about whether or not a particular job performance is
attainable.
• Assuming all other things are equal, an employee will
be motivated to try a task, if he or she believes that it
can be done.
 This expectancy of performance may be thought of in
terms of probabilities ranging from zero (a case of "I
can't do it!") to 1.0 ("I have no doubt whatsoever that I
can do this job!")
• A number of factors can contribute to an employee's
expectancy perceptions:
 the level of confidence in the skills required for the task
 the amount of support that may be expected from
superiors and subordinates
 the quality of the materials and equipment
 the availability of pertinent information
• Previous success at the task has also been shown to
strengthen expectancy beliefs.
ii. Instrumentality: "What's the probability that, if I do a good
job, that there will be some kind of outcome in it for me?"
 If an employee believes that a high level of
performance will be instrumental for the acquisition
of outcomes which may be gratifying, then the
employee will place a high value on performing well.
 Vroom defines Instrumentality as a probability belief
linking one outcome (a high level of performance, for
example) to another outcome (a reward).
 Instrumentality may range from a probability of 1.0
(meaning that the attainment of the second outcome --
the reward -- is certain if the first outcome -- excellent
job performance -- is attained) through 0.0 (meaning
there is no likely relationship between the first
outcome and the second).
E.g. of zero instrumentality would be exam grades that
were distributed randomly (as opposed to be awarded
on the basis of excellent exam performance).
 Commission pay schemes are designed to make
employees perceive that performance is positively
instrumental for the acquisition of money.
 For management to ensure high levels of
performance, it must tie desired outcomes (positive
valence) to high performance, and ensure that the
connection is communicated to employees.
 The VIE theory holds that people have preferences
among various outcomes.
 These preferences tend to reflect a person's
underlying need state.
iii. Valence: "Is the outcome I get of any value to me?“
 The term Valence refers to the emotional orientations
people hold with respect to outcomes (rewards).
 An outcome is positively valent if an employee would
prefer having it to not having it.
 An outcome that the employee would rather avoid
( fatigue, stress, noise, layoffs) is negatively valent.
 Outcomes towards which the employee appears
indifferent are said to have zero valence.
 Valences the level of satisfaction people expect to get
from the outcome (as opposed to the actual satisfaction
they get once they have attained the reward).
 Vroom suggests that an employee's beliefs about
Expectancy, Instrumentality, and Valence interact
psychologically to create a motivational force such that
the employee acts in ways that bring pleasure and
avoid pain.
 People elect to pursue levels of job performance that
they believe will maximize their overall best interests
(their subjective expected utility).`
 There will be no motivational forces acting on an employee
if any of these three conditions hold:
1. the person does not believe that he/she can successfully
perform the required task
2. the person believes that successful task performance will
not be associated with positively valent outcomes
3. the person believes that outcomes associated with
successful task completion will be negatively valent (have
no value for that person)
MF= Expectancy x Instrumentality x Valance
Instrumental
Motivational ity
Force Expectancy Perceived Valance
Perceived probability Value of
== probability x that Good
x expected
Force directing that effort will performance outcomes
Specific lead to Good will lead to to the
Behavioral performance Desired individual
Alternatives outcomes
/Rewards

Self efficiency Trust Values

Goal Difficulty Control Needs
Perceived control Policies Goals
Preferences
4.5. McClelland’s Theory of Needs
• According to David McClelland, regardless of culture or
gender, people are driven by three motives:
1) Achievement,
2) Affiliation, and
3) Influence.
• Since McClelland's first experiments, over 1,000 studies
relevant to achievement motivation have been conducted.
 These studies strongly support the theory.
1. The Need for Achievement :- characterized by the
wish to take responsibility for:
 finding solutions to problems,
 master complex tasks,
 set goals,
 get feedback on level of success.
2. The need for Affiliation :-
 characterized by:
 a desire to belong,
 an enjoyment of teamwork,
a concern about interpersonal relationships, &
 a need to reduce uncertainty.
3. The need for power :
 characterized by:
 a drive to control and influence others,
a need to win arguments,
a need to persuade and prevail
 According to McClelland, the presence of these
motives or drives in an individual indicates a
predisposition to behave in certain ways.
 Therefore, from a manager's perspective, recognizing
which need is dominant in any particular individual
affects the way in which that person can be
motivated.
•
 Summary
• People with achievement motives are motivated by:
 standards of excellence,
 delineated roles and responsibilities and
 concrete, timely feedback.
• People with affiliation motives are motivated when they
can accomplish things with people they know and trust.
• The power motive is activated when people are allowed
to have an impact, impress those in power, or beat
competitors.
4.6. Theory of “X” and Theory of “Y”:
• Douglas McGregor observed two diametrically opposing
view points of managers about their employees:
i. one is negative called “Theory of X” and
ii. one is positive called “Theory of Y”
iii.Theory of X :
• Assumptions of managers who believe in the “Theory of X” :
√ Employees dislike work; if possible avoid
√ Employees must be coerced, controlled or threatened
to do the work
√ Employees avoid responsibilities & seek formal direction
  Most employees consider security of job, most
important of all other factors in the job and have very
little ambition
ii. Theory of Y
• Assumptions of managers who believe in the “Theory of Y”:
 Employees love work as play or rest
 Employees are self directed and self controlled and
committed to the organizational objectives
 Employees accept and seek responsibilities
 Innovative spirit is not confined to managers alone, some
employees also possess it.
• Theory of X assumes Maslow’s lower level needs
dominate in employees.
• Theory of Y assumes Maslow’s higher level needs
dominate in employees.
4.7. Goal Setting Theory
• Edwin Locke proposed that setting specific goals will
improve motivation.
Salient Features
 Specific goal fixes the needs of resources and efforts
 It increases performance
 Difficult goals result higher performance than easy job
 Better feedback of results leads to better to better
performance than lack of feed back.
 Participation of employees in goal has mixed result
 Participation of setting goal, however, increases
acceptance of goal and involvements.
 Goal setting theory has identified two factors which
influences the performance:
1. Goal commitment
2. Self efficiency
• In the case of low self-efficiency level, they will lessen
or even abandon when meeting challenges.
4.8. Reinforcement Theory
• Focuses its attention as to what controls behavior.
• In contrast to goal setting theory, which is cognitive
approach , focuses attention on what initiates behavior.
• Behavior, as per cognitive approach is initiated by
internal events.
• Reinforcement theory argues that behavior is reinforced
and controlled by external events.
 The classical conditioning proposed by Pavlov explains
this in a better way.
4.9. Equity theory
• This theory of motivation centers around the principle
of balance or equity.
• Level of motivation in an individual is related to his or
her perception of equity & fairness practiced by mgt.
• The greater the fairness perceived, the higher the
motivation and vice versa.
 In this assessment of fairness, employee makes
comparison of input in the job ( in terms of
contribution) with that of outcome (in terms of
compensation) and compares the same with that of
another colleague of equivalent cadre.
 Chapter Five

Controlling Function
5.1. Definition
There are many definitions of controlling.
1. Controlling is the process of determining what is being
accomplished.
2.Controlling is evaluating the performance and, if
necessary, applying corrective measures so that the
performance takes place according to plans.
3.Controlling is measurement and correction of
performance in order to make sure that enterprise
objectives and the plan advised to attain then are being
accomplish.
 Controlling Cont’d…

4. Controlling is looking behind planning bears a close

relationship to controlling.
5.Effective controlling assists to regulate actual
performance to assure that it takes place as planned.
6.Controlling exists at every management level from
president to supervisor of a company
 Control is the process through which managers assure
that actual activities conform to planned activities
ACCORDING TO BREACH,
"Control is checking current performance against
predetermined standards contained in the plans, with
a view to ensuring adequate progress and satisfactory
performance.“

ACCORDING TO GEORGE R TERRY

"Controlling is determining what is being accomplished
i.e., evaluating the performance and if necessary,
applying corrective measures so that the performance
takes place according to plans."
 Controlling Cont’d…
ACCORDING TO BILLY E GOETZ,
"Management control seeks to compel events to
conform plans".
ACCORDING TO ROBERT N ANTHONY,
"Management control is the process by which managers
assure that resources are obtained and used
effectively and efficiently.”
ACCORDING TO KOONTZ AND ODONNELL,
"Managerial control implies measurement of
accomplishment against the standard and the
correction of deviations to assure attainment of
objectives according to plans."
IN THE WORDS OF HAYNES AND MASSIE
"Fundamentally, control is any process that guides
activity towards some predetermined goal. The
essence of the concept is in determining whether the
activity is achieving the desired results”.
IN THE WORDS OF HENRY FAYOL,
 Control consists in verifying whether everything
occurs in conformity with the plan adopted, the
instructions issued and the principles established. Its
object is to find out the weakness and errors in order
to rectify them and prevent recurrence.
 Controlling Cont’d…
 It operates on everything, i.e., things, people and
actions".
• In general, managerial function of control consists in a
comparison of the actual performance with the planned
performance with the object of discovering whether all
is going on well according to plans and if not why.
• Remedial action arising from a study of deviations of
the actual performance with the standard or planned
performance will serve to correct the plans and make
suitable changes.
 Controlling Cont’d…
• Controlling is the nature of follow-up to the other
three fundamental functions of management.
• There can, in fact, be not controlling without previous
planning, organizing and directing.
->Controlling cannot take place in a vacuum.
 Controlling Cont’d….
Purpose of controlling
1.To adapt to Environmental change
2.To limit the accumulation of error
3.To cope with organizational complexity
4.To minimize cost
 Controlling Cont’d….
Areas of Control
Mostly defined interms of the 4 basic resources
Physical
Informational
Human
Financial Resources
 Controlling Cont’d….
Levels off Control
Strategic control- focuses on the effectiveness of the strategies:
Structure, leadership, technology, HR, inf’n and operational control
systems; can be center or decent in int’na operations
Structural control- focuses on how the elts of the organ’nal structure
are serving their purpose
Operations control
Preliminary control-focus on inputs
Screening intended purpose“- focus on meeting
standard
-relies on feedback process/periodical inspection
Postaction “- on the output
 and financial control- through budgeting,
5.2. THE BASIC CONTROLL PROCESS
Three steps:
1.Establishing standards.
2.Measuring performance against these standards.
3.Correcting variations from standard and plans /
correction of deviations.
1. ESTABLISHING STANDARDS
• Standards are simply criteria of performance.
• Standards are the selected points in a planning
performance at which performance is measured, so
that managers can receive signals about how things are
going.
 There are many kinds of standard:
(1)Physical Standard (5) program Standard
(2) cost Standard (6) intangible Standard
(3) capital Standard (7) goals/ objectives Standard
(4)revenue Standard (8)Strategic plans as control
point strategic control.
2. MEASUREMENT OF PERFORMANCE
• It is the second step of control process.
• Although such measurement is not always
predictable, but if standards are appropriately drawn
and if means are available for determining exactly
what subordinates are doing, then measurement of
performance is fairly easy.
• But there are many activities for which it is difficult to
develop accurate standards and there are many
activities that are hard to measure.
E.g. Technical kind of work is hard to measure performance .
3. COMPARING PERFORMANCE WITH STANDARDS
 -Can be >, <, or = the established standrds
 Time table is conditioned by many factors
 Actions may be
 Maintaining status quo
 Changing the standard
 Taking corrective actions
 Controlling Cont’d…
3. CONSIDERING CORRECTION OF DEVIATIONS
• It is fourth and last step of control process.
• If performance is measured accurately, it is easier to
correct deviations
• Managers know exactly where the corrective
measure must be applied
• Correction of deviations is the point at which contact
can be related to the other managerial factions.
• Managers may correct deviations by:
 redrawing their plans or
 modifying their goals or
 clarification of duties.
 CRICTICAL CONTREL POINTS & STANDARDS
• Standards are yardsticks against which expected
performance is measured.
• In simple operation, a manager may control through
careful observations.
• But, in most operations, this is not possible because of
the complexity of the operations.
• Manager must choose points for special attention and
then watch them to be sure that the whole operation is
proceeding as planned.
• The points selected for control should be critical.
• With such standards, manager can handle a large group of
subordinates and plans are working out the principle or critical.
 Controlling Cont’d…
• Points control states “effective control requires
attention to these factors critical to evaluating
performance against plans.
QUESTION OF SELECTED CRITICAL POINT OF CONTROLI
• In selection of critical control points, manager must
ask themselves such questions.
1-What will best reflect the goals of my dep’t?
2- What will best show me when these goals are not
being met?
3-What will best measure critical deviation?
4-What will tell me who is responsible for any failure?
5-What standard will cost the least?
6- For what standards is information economically-available?

TYPES OF CRITICAL POINT STANDARDS

There are many types of standards:
1-PHYSICAL STANDARDS
-are non-monetary measurements and common at
operating level where material is used, labor is
employed, services are rendered and goods- are
produced
-they may-reflect quantities such as labor hours per
unit of output, unit of production per machine hour,
etc.
 Controlling Cont’d…

• They may also reflect quality such as hardness of

bearing, durability of fabric, fastness of color, etc.

2- COST STANDARDS
• Cost standards are monetary measurements and
common at the operating level.
• Cost standards are widely used to measure direct and
indirect costs per unit produced, labor cost per unit or
per hour material cost per unit, machine cost per hour,
etc.
3.CAPITAL STANDARDS
There are varieties of capital standards.
 are primarily related to the balance sheet rather than
to the income statements.
 range from monetary measurements to physical items.
 may be indifferent ratios such as the ratio of current
assets to current liabilities ,etc.
4. REVENUE STANDARDS
• arise from attaching monetary values to sales.
• may include such standards as average sales per
customer, etc.
 Controlling Cont’d…
4. PROGRAME STANDARDS
 Such standards are determined for installing a variable
budget program, for example, program for improving
the quality of a sale fore.

5. INTANGIBLE STANDARDS
 Sometime it is difficult to establish standards for
quantitative and qualitative measurement, especially
when human relationships count in performance.
 It is very difficult to measure human attitudes, in
connection with individual’s loyalty, efficiency, etc.
 All this need to be based on intangible standards.
6. GOALS AS STANDARDS
 Goal can be used as performance standards.
 Both in simple & in complex operations, quantitative
and qualitative Goals represents an important
development in the area of standards.
7.STRATEGIC PLANS AS CONTOL POINTS FOR STRATEGIC
CONTROL
 Strategic plans require strategic control.
 Through the use of strategic control awareness about
the organizational performance and about ever
changing environment by monitoring it.
 Controlling Cont’d…

CONTROL AS A FEED BACK SYSTEM

• Many systems control themselves through information

feedback, which shows deviations from standards.
• A simple feedback system can be shown by figure.
• No undesirable Planning Implementation Controlling
deviations of plans.
• comparison plans from plans with result.
• Undesirable deviation Corrective Action
• Any attempt to control without plan is meaningless.
• Plans furnish the standards of control.
• Information feedback is like the house thermostat
when the house temperature falls below the preset
level, an electric message is sent to the heatingsystem,
which is then activated.
 When the temperature increases and reaches the (set-
level) another message shuts off the heater.
 This continual measurement and training on and off
the heater keeps the house at the desired
temperature.
 A similar process activates the air-exceed the preset
level, the air conditioning system cool the house to -
the desired temperature.
 Controlling Cont’d…
• Like wise, in human being body, a number of
feedback systems control temperature, blood
pressure and another conditions.
• Management control as a feedback system is similar
to the system of feedback in-house thermostat.
• This can be shown by diagram.
• Desired Actual Measurement of Comparison of
actual Performance. Performance. actual
performance. performance against standard.
Implementation of Program of Analysis of cause of
Identification of corrections. corrective action.
deviation. deviations.
 Controlling Cont’d…
CONTROL AS FEEDBACK SYSTEM
 This system places control in more complex way.
 These systems including steps:
 Establishing standards, measuring performance and
correcting for deviations.
 Managers do establish standards, measure
performance and identify deviations, they must then
to make the necessary corrective action.

FEED FORWARD CONTROL

 Feed forward control is system that attempts to
identify future deviations.
 Controlling Cont’d…
• This control shows the deficiency of historical data.
• For example, one of the difficulties with such historical
data is that they tell business managers in November
that they lost money in October or even September
because of some thing that was done in July.
• At this late time, such information is only an interesting
historical fact.
• In feed forward control, a manager is so dependent for
purposes of control on accounting and statistical data.
 Controlling Cont’d…
CONTROL TECHNIQUES
• A BUDGET is widely used device for managerial control.
• Budgeting is the device for accomplishing control.

THE CONCEPT OF BUDGETING

• Budgeting is the formulation of plans for a given future
period in numerical terms.
THE PURPSE OF BUDGETING:
 Starting plans in terms of numbers and breaking into
parts parallel to the parts of an organization.
 Budgets enable managers to see clearly what capital
will be spent by whom and where, and what expense,
revenue the plans will involve.
 Controlling Cont’d…

 A budget must reflect the organizational pattern.

 When plans are completed, co-coordinated and
developed, a departmental budget can be used as an
instrument of control.

TYPES OF BUDGETS
Budgets may be classified in to several basic types
1. REVENUE AND EXPENSE BUDGETS; and profit budget=
Operating budget
 Revenue and expense budgets are most common
budget which are used to make plans for revenue and
expenses in monetary terms.
 Controlling Cont’d…
2. TIME , SPACE , MATERIAL &PRODUCT
BUDGETS=Non-monetary budgets
 Many budgets are better expressed in quantities
rather than in numerical terms or monetary terms.
 Although such budgets are usually translated into
monitory terms but if they are expressed in terms of
quantities, they must be significant at certain stage of
planning and control. I.e. machine hours, etc.
3. CAPITAL EXPENDITURE BUDGETS= Financial budget
 shows capital expenditure for plant, machinery,
equipment, inventories, etc.
4.Balance sheet budget = Financial budget
 Forecast of ass and liab.
 Controlling Cont’d…
4. Cash flow/CASH BUDGETS = Financial budget
The cash budget is a forecast of cash receipts and cash
expenditure.
Cash budgeting shows the availability of excess cash etc.

EFFECTIVE BUDGETARY CONTROL

If budgetary controls are to work well, managers have
limitations and they must be tailored to each job.
There are many effective budgetary controls:
1.TOP-MANAGEMENT SUPPORT
To make most effective budget, administration must
receive the whole-hearted support of top-management.
 Controlling Cont’d…

2. PARTICIPATION
 Real participation in budget making is necessary for
success.
3. STANDARDS
 One of the key to successful budgeting is to develop and
make available standards by which programs and work
can be translated in to need for labor, operating
expenses ,capital expenditures , space and other
resources.
 Many budgets fail for lake of such standards.
 Controlling Cont’d…
4. INFORMATION
• Finally, if budgetary control is to work, managers
need ready information about actual and forecast
performance under budgets by their departments.
• This information must be designed to show them
how well they are doing.
 Controlling Cont’d…
DANGERS IN BUDGETING
• Some budgetary control programs are so complete
and detailed that they must become meaningless and
expensive.
• There are many dangers in budgeting.
1. Over budgeting.
2. Hiding influences.
3. Causing inflexibility.
4. Overriding enterprise goals.
 Controlling Cont’d…

METHODS FOR DECREASING DANGERS

1.VARIABLE BUDGETS
 B/c dangers arise from inflexibility in budgets so these
dangers can be decrease by variable/flexible budgeting?
2. ALTERNATIVE AND SUPLEMENTARY BUDGETS
 Another method of obtaining variable budgeting is to
establish alternative budgets and variable budgets can
also be obtained by supplementary budgets.
3. ZERO-BASE BUDGETING
 Another method to obtain budget flexibility is zero-
base budgeting.
 Controlling Cont’d…

TRADITIONAL NON BUDGETORY ONTROL TECHNIQUES

• There are also many traditional non-budgetary
control techniques used for budgetary control.
• The important ones are
1.STATISTICAL DATA
 Statistical analysis of an operation and the clear
presentation of statistical data(historical forecast
nature) are important to control.
 Most managers understand statistical data best when
the data are presented in chart or graphic form.
 In chart or graphic, trends & r/nships are easier to see.
 Controlling Cont’d…
 Moreover, if data are meaningful,when presented on
chart, then data should be formulated in such a way
that comparison with some standard can be made.
 What is the significance of a 3 or 10 percent rise or fall
in sales or costs?
 Who is responsible for clear presentation of statistical data
in chart in an art that requires imagination?
 Moreover, since no manager can do anything about
history so the data, presented on charts should be made
available about information like variations due to
accounting adjustment and other periodic differences.
 Controlling Cont’d…
SPECIAL REPORTS AND ANALYSIS
• Special reports and analyses help in problems for
control purposes.
• Although accounting and statistical reports give
necessary information, there are some problems in
which they are inadequate.
• One successful manager of a completed operation
hired a small staff of trained analysts and gives them
no assignment other than investigating and analyzing
activities under his control.
• This group developed a surprising sense for situations
in which things did not seem just right.
 Controlling Cont’d…
• Almost invariable, their investigation disclosed
opportunities for cost improvement.
OPERATIONAL AUDIT OR INTERNAL AUDIT
• Another effective tool of managerial control
• It is regular and independent appraisal of the
accounting, financial and other operations of an
enterprise by a staff of internal auditors.
• The operational auditors reflect the fact, appraise
policies, procedure, use of authority, quality of
management, effectiveness of methods, special
problems and other phases of operations.
 Controlling Cont’d…

PERSONAL OBSERVATION
• One should never over-look the importance of control
through personal observation.
• Budgets, charts, reports, ratios, auditors,
recommendations and other devices are essential to
control.
• But the manager who depends wholly on these devices
and sit cannot make effective control.
• Managers should have task of seeing the enterprise
objectives are accomplished by people.
• A manager can get information and experience from
personal observation.
 Controlling Cont’d…

TIME-EVENT NET WORK ANALYSIS

• Time- event network analysis is a planning & control
technique. It is also called(PERT)=Performance,
Evaluation and Review Technique.
• PERT is a planning and control technique through
which we evaluate a program and courses of
implementation and on the basis of that evaluation
we review over program.
• In this time, event analysis introduced in PERT from
and then introduced further two more techniques.
• First is Gantt chart