PRINCIPLES OF MANAGEMENT

Unit IV - Leading
Motivation
Motivation is a human psychological characteristic that contributes to a persons degree of
commitment. It includes the factors that cause, channel, and sustain human behavior in a
particular committed direction. Motivating is the management process of influencing
peoples behavior based on the knowledge of what makes people tick. Motivation and
motivating deals with the range of conscious human behavior between two extremes: reflex
actions and learned habits.
Early Theories of Motivation
Motivation was one of the earliest concepts with which managers and management
researchers wrestled. The traditional model is often associated with Frederick Taylor and
scientific management. Managers determined the most efficient way to perform repetitive
tasks and then motivated workers with a system of wage incentives the more workers
produced, the more they earned. The underlying assumption was that managers understood
the work better than workers, who were essentially lazy and could be motivated only by
money. A legacy of this model is the practice of paying salesperson on a commission basis.
Assumptions
Work is inherently distasteful to most people.
What they do is less important than what they earn for doing it.
Few want or can handle work that requires creativity, self-direction or self control.
Policies
The manager should closely supervise and control subordinates.
He or she must break down tasks into simple, repetitive easily learned operations.
He or she must establish detailed work routines and procedures, and enforce these fairly
but firmly.
Expectations
People can tolerate work if the pay is decent and the boss is fair.
If tasks are simple enough and people are closely controlled, they will produce up to
standard.
The human relations model is often associated with Elton Mayo and his contemporaries.
Mayo ad other human relations researchers found that the boredom and repetitiveness of
many tasks actually reduced motivation, while social contacts helped create and sustain
motivation. The conclusion is that managers could motivate employees by acknowledging
their social needs and making them feel useful and important. Modern day legacies of this
model include suggestion boxes, company uniforms, organization newsletters, and employee
input in the performance evaluation process.
Under the traditional model, workers had been expected to accept managements authority in
return for high wages. Under the human relations model, workers were expected to accept
managements authority because supervisors treated them with consideration and allowed
them to influence the work situation. In both cases the intent of managers remained the same:
to get workers to accept the work situation as established by managers.
Assumptions
People want to feel useful and important.
People want to belong and to be recognized as individuals.
These needs are more important than money in motivating people to work.

Policies
The manager should make each worker feel useful and important.
He or she should keep subordinates informed and listen to their objections to his or her
plans.
The manager should allow subordinates to exercise some self direction and self control on
routine matters.
Expectations
Sharing information with subordinates and involving them in routine decisions will
satisfy their basic needs to belong and to feel important.
Satisfying these needs will improve morale and reduce resistance to formal authority
subordinates will willingly cooperate.
The human resources model is often associated with Douglas McGregor. McGregor and
other theorists criticized the human relations model as simply a more sophisticated approach
to the manipulation of employees. They also charged that, like the traditional model, the
human relations model oversimplified motivation by focusing on just one factor, such as
money or social relations.
McGregor identified two different sets of assumptions about employees. The traditional
view, known as Theory X, holds that people have an inherent dislike of work. Although
workers may view it as a necessity, they will avoid it whenever possible. In this view, most
people prefer to be directed and to avoid responsibility. As a result, the work is of secondary
importance and managers must push employees to work.
Theory Y is more optimistic. It assumes that work is as natural as play or rest. In theory Y,
people want to work and can derive a great deal of satisfaction from work. In this view,
people have the capacity to accept even seek responsibility, and to apply imagination,
ingenuity and creativity to organizational problems.
The problems according to Theory Y, is that modern industrial life does not fully tap the
potential of human beings. To take advantage of their employees innate willingness and
ability to work, managers using Theory Y should provide a climate that gives employees
scope for personal improvement. Participative management is one way to do this.
Assumptions
Work is not inherently distasteful. People want to contribute to meaningful goals that they
have helped establish.
Most people can exercise far more creativity, self direction, and self-control than their
present jobs demand.
Policies
The manager should make use of underutilized human resources.
He or she must create an environment in which all members may contribute to the limits
of their ability.
He or she must encourage full participation in important matters, continually broadening
subordinate self direction and self control.
Expectations
Expanding subordinate influence, self direction, and self control will lead to direct
improvements in operating efficiency.
Work satisfaction may improve as a by-product of subordinates making full use of
their resources.
Contemporary Theories of Motivation
This can be broadly classified as content theories and process theories.
Content Theories: They are based on human needs. Some of the theories are explained
below:
Maslows Hierarchy of Needs
Maslow's hierarchy of needs is a theory of motivation and personality developed by the
psychologist Abraham H. Maslow (1908-1970). Maslow's hierarchy explains human behavior
in terms of basic requirements for survival and growth. These requirements, or needs, are
arranged according to their importance for survival and their power to motivate the
individual. The most basic physical requirements, such as food, water, or oxygen, constitute
the lowest level of the need hierarchy. These needs must be satisfied before other, higher
needs become important to individuals. Needs at the higher levels of the hierarchy are less
oriented towards physical survival and more toward psychological well-being and growth.
Maslow's hierarchy specifies the following levels:
Physiological needs: These are the basic requirements for human physical survival. They
include such essentials as air, food, water, shelter and sex. When these needs are unmet,
human beings will focus on satisfying them and will ignore higher needs.
Safety needs: These include needs for a sense of security and predictability in the world.
The person tries to maintain the conditions that allow him or her to feel safe and avoid
danger.
Love and belongingness (social) needs: These needs include longing for an intimate
relationship with another person as well as the need to belong to a group and to feel
accepted. Maslow emphasized that these needs involve both giving and receiving love.
Esteem needs: Esteem needs include both self-esteem and the esteem of others. Self-
esteem is the feeling that one is worthwhile, competent, and independent. The esteem of
others involves the feeling that other people respect and appreciate the person.
Self-actualization needs: These are the needs associated with realizing one's full
potential. As these needs emerge, the person focuses on doing what he or she is meant to
do in life, developing his or her talents and abilities to their fullest extent.

Alderfers ERG Theory
ERG theory is a theory of motivation that says people strive to meet a hierarchy of existence,
relatedness, and growth needs; if efforts to reach one level of needs are frustrated,
individuals will regress to a lower level.


McClellands Need Theory
Need for Achievement (nAch): This is the need for challenge, for personal accomplishment
and success in competitive situations. A person with a high need for achievement has three
distinct characteristics like personal responsibility, feedback and moderate risk.
Need for Power (nPow): This is the need to dominate, influence and control people. The
people with a high need for power look for position of leadership. They like to set goals,
make decision and direct the activities.
Need for Affiliation (nAff): This is the need that concerns an individual to establish and
maintain warm, close & intimate relationships with other people.

Herzbergs Two Factor Theory
In the late 1950s, Frederick Herzberg and his associates conducted a study of the job attitudes
of 200 engineers and accountants. Herzberg placed responses in one of 16 categories: the
factors on the right side of the figure were consistently related to job satisfaction; those on the
left side to job dissatisfaction. From this research, Herzberg concluded that job dissatisfaction
and job satisfaction arose from two separate sets of factors. This theory was termed the two
factor theory.
Dissatisfiers (hygiene factors) included salary, working conditions, and company policy
all of which affected the context in which work was conducted. The most important of these
factors is company policy, which many individuals judge to be a major cause of inefficiency
and ineffectiveness. Positive ratings for these factors did not lead to job satisfaction but
merely to the absence of dissatisfaction.
Satisfiers (motivating factors) include achievement, recognition, responsibility, and
advancement all related to the job content and the rewards of work performance. Positive
ratings for these factors lead to job satisfaction.
Herzbergs work was influential in the growth of job enrichment programs. This more
complicated model of needs; whereby both satisfiers and dissatisfiers can be present for a
person; underscores how important it is that managers understand differences between human
beings when designing motivational approaches.


Process Theory: They are based on the assumption that behavior is determined by expected
outcomes. Some of the theories are explained below:
Adams Equity Theory
Equity theory is based on the assumption that a major factor in job motivation is the
individuals evaluation of the equity or fairness of the reward received. Equity can be defined
as a ratio between the individuals job inputs (such as effort or skill) and job rewards (such as
pay or promotion). According to equity theory, individuals are motivated when they
experience satisfaction with what they receive from an effort in proportion to the effort they
apply. People judge the equity of their rewards by comparing them either to the rewards
others are receiving for similar input or to some other effort/reward ratio that occurs to them.
An example will demonstrate the differences.
Suppose that two co-workers, John & Paul, are both assigned projects that involve
developing a pricing strategy on a product. Johns product is a new part of the organizations
product line and faces a complex competitive situation. Pauls product has been sold for ten
years and has a track record regarding the relationship between sales and price levels. Johns
effort will probably need to be much greater than Pauls given the relatively greater
uncertainties that John would face in completing the task.
According to equity theory, one will factor in this difference in job inputs between them in
deciding if the reward is equitable. This is the first kind of equity comparison comparison
between peoples situations. On the other hand, if one has in mind that working sixty hour
weeks on projects like this should earn him compensating time-off, he is making the second
kind of equity comparison judging against some standard he would prefer. In either case,
equity theory joins need theory as another view of what satisfies or dissatisfies people.
Most discussion and research on equity theory focuses on money as the most significant
reward in the workplace. People compare what they are being paid for their efforts with what
others in similar situations receive for theirs. When they feel inequity exists, a state of tension
develops within them, which they try to resolve by appropriately adjusting their behavior. A
worker who perceives that he or she is being underpaid, for example, may try to reduce the
inequity by exerting less effort.
People use different methods to reduce inequity. Some will rationalize that their efforts were
greater or less than they originally perceived them to be, or that the rewards are more or less
valuable. Equity theory suggests how very important it is that managers get to know their
employees and recognize that jobs are done in the context of human relationships. Only then
can they begin to appreciate the equity calculations that their employees make.
Ratio Comparison Perception
O/I a < O/I b Under-rewarded (Equity Tension)
O/I a = O/I b Equity
O/I a > O/I b Over-rewarded (Equity Tension)

Victor Vrooms Expectancy Theory
Expectancy theory argues that the strength of a tendency to act in a certain way depends on
the strength of an expectation that the act will be followed by a given outcome and on the
attractiveness of that outcome to the individual. In more practical terms, expectancy theory
says that an employee will be motivated to exert a high-level of effort.
When an employee is motivated to exert a high level of effort, he or she believes that effort
will lead to a good performance appraisal. A good appraisal will lead to organizational
rewards such as a bonus, a salary increase, or a promotion; and that the rewards will satisfy
the employees personal goals. The theory, therefore, focuses on three components and
relationships.
Components
Valence: Value or importance placed on a particular reward.
Expectancy: Belief that effort leads to performance.
Instrumentality: Belief that performance is related to rewards.
Relationships
Effort-performance relationship: The probability perceived by the individual that
exerting a given amount of effort will lead to performance.
Performance-reward relationship: The degree to which the individual believes that
performing at a particular level he or she will attain the desired outcome or expectations
of his employer.
Rewards-personal goals relationship: The degree to which organizational rewards
satisfy individual personal goals or needs and the attractiveness is of those potential
rewards for the individual.
Expectancy Model


Skinners Reinforcement Theory
Reinforcement theory, associated with the psychologist B F Skinner and others, shows how
the consequences of past behavior affect future actions in a cyclical learning process. This
process may be expressed as follows:
Stimulus > Response > Consequences > Future Response
On this view, the individuals own voluntary behavior (response) to a situation or event
(stimulus) is the cause of specific consequences. If those consequences are positive, the
individual will in the future tend to have similar responses in similar situations. If those
consequences are unpleasant, the individual will tend to change his or her behavior in order to
avoid them. For example, people may be likely to obey the law and a managers legitimate
instructions because they have learned at home and at school that disobedience leads to
punishment. The other side of the coin is that people try to meet goals at work because they
have learned that they stand a good chance of being rewarded. This is known as the law of
effect. According to reinforcement theory, a person is motivated when he or she responds to
stimuli in consistent patterns of behavior over time. Reinforcement theory, like expectancy
theory, is a way to link motivation and behaviors.
Behavior modification uses reinforcement theory to change human behavior. Thus, a
manager who wishes to change employee behavior must change the consequences of that
behavior. Someone who is frequently late, for example, might be motivated to come in on
time (a behavior change) if the manager expresses strong approval for each on time or early
appearance (change of consequences), rather than ignoring on-time arrival. Lateness may also
be stopped by expressing strong disapproval of the late arrival time if the managers had
previously been ignoring the late arrivals.
There are four common methods of behavior modification:
Positive reinforcement: The use of positive consequences to encourage desirable behavior,
such as a raise in salary or rewards/praise.
Negative reinforcement (avoidance learning): Learning that occurs when individuals
change behavior to avoid or escape unpleasant circumstances, such as positive criticism or
strict evaluation.
Punishment: The application of negative consequences to stop or correct improper behavior,
such as reduced pay or dismissal.
Extinction: The absence of reinforcement for undesirable behavior so that the behavior
eventually stops recurring, such as to neglect or ignore.

Lockes Goal Setting Theory
Goal setting theory focuses on the process of setting goals. According to psychologist Edwin
Locke, the natural human inclination to set and strive for goals is useful only if the individual
both understands and accepts a particular goal. Furthermore, workers will not be motivated if
they do not possess and know they do not possess the skills needed to achieve a goal.
According to goal setting theory, then, individuals are motivated when they behave in ways
that move them to certain clear goals that they accept and can reasonably expect to attain.
Goal setting process is described in terms of four phases of a persons reasoning.
1. Establishment of a standard to be attained.
2. Evaluation of whether the standard can be achieved.
3. Evaluation of whether the standard matches personal goals.
4. The standard is accepted, the goal is thereby set, and behavior proceeds toward the goal.


Leadership
Leadership is the art or process of influencing people so that they will strive willingly &
enthusiastically towards the achievement of the organizational vision and goal. It is also
defined as the process of directing and influencing the task related activities of group
members.
Approaches to Leadership
The Trait Approach
Trait theory assumes that leaders are born, not made; that is, they share certain inborn
personality traits. This approach to leadership differentiates leaders from non-leaders by
focusing on personal qualities and characteristics.
The traits are classified into several categories, namely;
Achievement drive: high level of effort, high levels of ambition, energy and initiative.
Leadership motivation: an intense desire to lead others and to reach shared goals.
Honesty and integrity: trustworthy, reliable, and open.
Self-confidence: belief in ones self, ideas and ability.
Cognitive ability: capable of exercising good judgment, strong analytical abilities and
conceptually skilled.
Knowledge of business: knowledge of industry and other technical matters.
Emotional Maturity: well adjusted, does not suffer from severe psychological disorders.
Others: charisma, creativity and flexibility.
Throughout history, strong leaders Buddha, Napoleon, Mao, Churchill, Thatcher, and
Reagan have all been described in terms of their traits. For example, when Margaret Thatcher
was the prime minister of Great Britain, she was regularly described as confident, iron willed,
determined and decisive. Individuals like; South Africas nelson Mandela, Virgin Group
CEO Richard Branson, Apple cofounder Steve jobs, former New York City mayor Rudolph
Giuliani and American Express chairman Ken Chenault are recognized as leaders and
described in terms such as charismatic, enthusiastic, and courageous.

The Behavioral Approach
When it became evident that effective leaders did not seem to have a particular set of
distinguishing traits, researchers tried to isolate the behavior characteristics of effective
leaders. In other words, rather than try to figure out who effective leaders are, researchers
tried to determine what effective leaders do, how they delegate tasks, how they communicate
with and try to motivate their followers or employees, how they carry out their tasks, and so
on. Behaviors, unlike traits, can be learned, so it followed that individuals trained in
appropriate leadership behaviors would be able to lead more effectively. These researchers
have focused on two aspects of leadership behavior: leadership functions and leadership
styles.
Leadership Functions
Researchers exploring leadership functions came to the conclusion that to operate effectively
groups need someone to perform two major functions: task related or problem solving
functions and group maintenance or social functions. Group maintenance functions include
such actions as mediating disputes and ensuring that individuals feel valued by the group. An
individual who is able to perform both successfully would be an especially effective leader.
Leadership Styles
The two leadership functions task related and group maintenance tends to be expressed in
two different leadership styles. Managers who have a task-oriented style closely supervise
employees to be sure the task is performed satisfactorily. Getting the job done is given more
emphasis than employees growth or personnel satisfaction. Managers with an employee
oriented (relationship oriented) style put more emphasis on motivating rather than controlling
subordinates. They seek friendly, trusting, and respectful relationships with employees, who
are often allowed to participate in decisions that affect them. Most managers use at least a
little of each style, but put more emphasis on either tasks or employees.

Continuum of Leadership Behavior
A continuum of leadership style extends from complete retention of power by the manager to
complete freedom for subordinates.
Autocratic (Telling): Manager makes decisions with little or no involvement of
nonmanagers.
Diplomatic (Selling): Manager makes decisions without consultation but tries to
persuade nonmanagers to accept them.
Consultative (Consulting): Managers obtains nonmanagers ideas and uses them in
decision making.
Participative (Joining): Manager involves nonmanagers heavily in the decision making
and may even delegate it to them completely.


The Ohio State Studies
Researchers at Ohio State sought to identify independent dimensions of leader behavior.
Beginning with over a thousand dimensions, they eventually narrowed the list to two
categories that substantially accounted for most of the leadership behavior described by
employees. They called these two dimensions; initiating structure and consideration.
Initiating structure refers to the extent to which a leader is likely to define and structure his or
her role and those of employees in the search for goal attainment. It includes behavior that
attempts to organize work, work relationships, and goals. The leader characterized as high in
initiating structure could be described as someone who assigns group members to particular
tasks, expects workers to maintain definite standards of performance and emphasized the
meeting of deadlines.
Consideration is described as the extent to which a person is likely to have job relationships
that are characterized by mutual trust, respect for employees ideas and regard for their
feelings. The person shows concern for followers comfort, well being, status and
satisfaction. A leader high in consideration could be described as one who helps employees
with personal problems, is friendly and approachable and treats all employees as equals.
A review of 160 studies found that both initiating structure and consideration were associated
with effective leadership. Specifically, consideration was more strongly related to the
individual. In other words, the followers of leaders who were high in consideration were
satisfied with their jobs and more motivated and also had more respect for their leader.
Initiating structure was more strongly related to higher levels of group and organization
productivity and more positive performance evaluations.
The University of Michigan Studies
Leadership studies undertaken at the University of Michigans Survey Research Center, at
about the same time as those being done at Ohio State, had similar research objectives: to
locate behavioral characteristics of leaders that appeared to be related to measures of
performances effectiveness.
The conclusions arrived at by the Michigan researchers strongly favored the leaders who
were employee oriented in their behavior. Employee-oriented leaders were associated with
higher group productivity and higher job satisfaction. Production-oriented leaders tended to
be associated with low group productivity and lower job satisfaction. Although the Michigan
studies emphasized employee-oriented leadership (or consideration) over production oriented
leadership (or initiating structure), the Ohio State studies garnered more research attention
and suggested that both consideration and initiating structure are important to effective
leadership.

Blake and Moutons Managerial Grid
Building on the work of the researchers at these Universities, Robert Blake and Jane Mouton
proposed a graphic portrayal of leadership styles through a managerial grid (sometimes called
leadership grid). The grid depicted two dimensions of leader behavior, concern for people
(accommodating peoples needs and giving them priority) on y-axis and concern for
production (keeping tight schedules) on x-axis, with each dimension ranging from low (1) to
high (9), thus creating 81 different positions in which the leaders style may fall.


The five resulting leadership styles are as follows:

1. Impoverished Management (1,1): Managers with this approach are low on both the
dimensions and exercise minimum effort to get the work done from subordinates. The
leader has low concern for employee satisfaction and work.
2. Task management (9,1): Also called dictatorial or perish style. Here leaders are more
concerned about production and have less concern for people. The style is based on
theory X of McGregor. Such a style can definitely increase the output of organization in
short run but due to the strict policies and procedures, high labor turnover is inevitable.
3. Middle-of-the-Road (5,5): This is basically a compromising style wherein the leader
tries to maintain a balance between goals of the company and needs of the people.
4. Country Club (1,9): This is a collegial style characterized by low task and high people
orientation where the leader gives thoughtful attention to the needs of people thus
providing them with a friendly and comfortable environment. However, a low focus on
tasks can hamper productivity.
5. Team Management (9,9): Characterized by high people and task focus, the style is based
on the theory Y of McGregor and has been termed as most effective style according to
Blake and Mouton.
The Contingency Approach
Researchers using the trait and behavioral approaches showed that effective leadership
depended on many variables, such as organizational culture and the nature of tasks. No, one
trait was common to all effective leaders. No, one style was effective in all situations.
Researchers therefore began trying to identify those factors in each situation that influenced
the effectiveness of a particular leadership style. Taken together, the theories resulting from
this research constitute the contingency approach to leadership. These theories focus on the
following factors:
1. Task requirements
2. Peers expectations and behavior
3. Employees characteristics, expectations and behavior
4. Organizational culture and policies
Hersey and Blanchards Situational Leadership Model
According to this model, the leader has to match the leadership style according to the
readiness of subordinates which moves in stage and has a cycle. Therefore, this theory is also
known as the life-cycle theory of leadership.
The theory, developed by Paul Hersey and Kenneth Blanchard, is based on the readiness
level of the people the leader is attempting to influence. Readiness is the extent to which
followers have the ability and willingness to accomplish a specific task. Ability is the
knowledge, experience, and skill that an individual possesses to do the job and is called job
readiness. Willingness is the motivation and commitment required to accomplish a given
task. The style of leadership depends on the level of readiness of the followers.
The readiness (R) is divided into a continuum of four levels which are:
R1 - low follower readiness: refers to low ability and low willingness of followers i.e. those
who are unable and insecure
R2 - low to moderate follower readiness: refers to low ability and high willingness of
followers i.e. those who are unable but confident
R3 - moderate to high follower readiness: refers to high ability and low willingness of
followers i.e. those who are able but insecure
R4 - high follower readiness: refers to high ability and high willingness of followers i.e.
those who are both able and confident
The direction is provided by the leader at the lower levels of readiness. Therefore, the
decisions are leader directed. On the other hand, the direction is provided by the followers at
the higher levels of readiness. Therefore, the decisions in this case are follower directed.
When the followers move from low levels to high levels of readiness, the combinations of
task and relationship behaviors appropriate to the situation begin to change.
For each of the four levels of readiness, the leadership style used may be a combination of
task and relationship behavior.
Task behavior: Extent to which the leader spells out the duties and responsibilities of a
follower which includes providing them direction, setting goals, and defining roles for them.
Usually a one-way communication exists which is meant to provide the direction to the
followers.
Relationship behavior: Extent to which the leader listens to the followers, and provides
encouragement to them. Here, a two-way communication exists between the leader and the
follower.
By combining the task and the relationship behavior, we arrive at the following four different
styles of leadership which correspond with the different levels of readiness.
S1 - Telling: This style is most appropriate for low follower readiness (R1). It emphasizes
high levels of both task and relationship behavior.
S2 - Selling: This style is most appropriate for low to moderate follower readiness (R2). It
emphasizes high levels of task behavior and limited relationship behavior.
S3 - Participating: This style is most appropriate for moderate to high follower readiness
(R3). It emphasizes high levels of relationship behavior but limited task behavior.
S4 - Delegating: This style is most appropriate for high follower readiness (R4). It
emphasizes low levels of both task and relationship behavior.

Leadership Style and the Work Situation: The Fiedler Model
Fred E. Fiedlers contingency theory of leadership effectiveness was based on studies of a
wide range of group effectiveness, and concentrated on the relationship between leadership
and organizational performance. This is one of the earliest situation-contingent leadership
theories given by Fiedler. According to him, if an organization attempts to achieve group
effectiveness through leadership, then there is a need to assess the leader according to an
underlying trait, assess the situation faced by the leader, and construct a proper match
between the two.
In order to assess the attitudes of the leader, Fiedler developed the least preferred co-worker
(LPC) scale in which the leaders are asked about the person with whom they least like to
work. The scale is a questionnaire consisting of 16 items used to reflect a leaders underlying
disposition toward others. The items in the LPC scale are pleasant / unpleasant, friendly /
unfriendly, rejecting / accepting, unenthusiastic / enthusiastic, tense / relaxed, cold / warm,
helpful / frustrating, cooperative / uncooperative, supportive / hostile, quarrelsome /
harmonious, efficient / inefficient, gloomy / cheerful, distant / close, boring / interesting, self-
assured / hesitant, open / guarded. Each item in the scale is given a single ranking of between
one and eight points, with eight points indicating the most favorable rating.
Fiedler states that leaders with high LPC scores are relationship-oriented and the ones with
low scores are task-oriented. The high LPC score leaders derived most satisfaction from
interpersonal relationships and therefore evaluate their least preferred co-workers in fairly
favorable terms. These leaders think about the task accomplishment only after the
relationship need is well satisfied. On the other hand, the low LPC score leaders derived
satisfaction from performance of the task and attainment of objectives; and only after tasks
have been accomplished, these leaders work on establishing good social and interpersonal
relationships.
Situational factor
According to Fiedler, a leaders behavior is dependent upon the favorability of the leadership
situation. Three factors work together to determine how favorable a situation is to a leader.
Leader-member relations: The degree to which the leader is trusted and liked by the
group members, and the willingness of the group members to follow the leaders
guidance.
Task structure: The degree, to which the groups task has been described as structured
or unstructured, has been clearly defined and the extent to which it can be carried out by
detailed instructions.
Position power: The power of the leader by virtue of the organizational position and the
degree to which the leader can exercise authority on group members in order to comply
with and accept his direction and leadership.
With the help of these three variables, eight combinations of group-task situations were
constructed by Fiedler. These combinations were used to identify the style of the leader.
The leaders effectiveness is determined by the interaction of the leaders style of behavior
and the favorableness of the situational characteristics. The most favorable situation is when
leader-member relations are good, the task is highly structured, and the leader has a strong
position power.
Research on the contingency model has shown that task-oriented leaders are more effective in
highly favorable (1, 2, 3) and highly unfavorable situation (7, 8) whereas relationship-
oriented leaders are more effective in situations of intermediate favorableness (4, 5, 6).
Fiedler also suggested that leaders may act differently in different situations. Relationship-
oriented leaders generally display task-oriented behaviors under highly favorable situations
and display relationship-oriented behaviors under unfavorable or intermediate favorable
situations. Similarly, task-oriented leaders frequently display task-oriented in unfavorable or
intermediate favorable situations but display relationship-oriented behaviors in favorable
situations.


The Path Goal Model
Path Goal theory was developed by Robert House and has its roots in the expectancy theory
of motivation. The theory is based on the premise that an employees perception of
expectancies between his effort and performance is greatly affected by a leaders behavior.
The leaders help group members in attaining rewards by clarifying the paths to goals and
removing obstacles to performance. They do so by providing the information, support, and
other resources which are required by employees to complete the task.
Houses theory advocates servant leadership. As per servant leadership theory, leadership is
not viewed as a position of power. Rather, leaders act as coaches and facilitators to their
subordinates. According to Houses path-goal theory, a leaders effectiveness depends on
several employee and environmental contingent factors and certain leadership styles.
Directive: Here the leader provides guidelines, lets subordinates know what is expected
of them, sets performance standards for them, and controls behavior when performance
standards are not met.
Supportive: The leader is friendly towards subordinates and displays personal concern
for their needs, welfare, and well-being.
Participative: The leader believes in group decision-making and shares information with
subordinates. He consults his subordinates on important decisions related to work, task
goals, and paths to resolve goals.
Achievement-oriented: The leader sets challenging goals and encourages employees to
reach their peak performance. The leader believes that employees are responsible enough
to accomplish challenging goals.
According to the theory, these leadership styles are not mutually exclusive and leaders are
capable of selecting more than one kind of a style suited for a particular situation.
However, this theory states that each of these styles will be effective in some situations but
not in others. It further states that the relationship between a leaders style and effectiveness
is dependent on the following variables:
Employee characteristics: These include factors such as employees needs, locus of
control, experience, perceived ability, satisfaction, willingness to leave the organization,
and anxiety. For example, if followers are high inability, a directive style of leadership
may be unnecessary; instead a supportive approach may be preferable.
Characteristics of work environment: These include factors such as task structure and
team dynamics that are outside the control of the employee. For example, for employees
performing simple and routine tasks, a supportive style is much effective than a directive
one. Similarly, the participative style works much better for non-routine tasks than routine
ones. When team cohesiveness is low, a supportive leadership style must be used whereas
in a situation where performance-oriented team norms exist, a directive style or possibly
an achievement-oriented style works better. Leaders should apply directive style to
counteract team norms that oppose the teams formal objectives.

Transactional Leadership
Transactional leadership involves motivating and directing followers primarily through
appealing to their own self-interest. The power of transactional leaders comes from their
formal authority and responsibility in the organization. The main goal of the follower is to
obey the instructions of the leader. The style can also be mentioned as a telling style. The
leader believes in motivating through a system of rewards and punishment. Here, the
exchange between leader and follower takes place to achieve routine performance goals.
These exchanges involve four dimensions:
Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good
performance and recognizes accomplishments.
Management by Exception (active): Watches and searches for deviations from rules and
standards, takes correct action.
Management by Exception (passive): Intervenes only if standards are not met.
Laissez Faire: Abdicates responsibilities and avoids making decisions.
Transformational Leadership
Transformational leadership may be found at all levels of the organization: teams,
departments, divisions, and organization as a whole. Such leaders are visionary, inspiring,
daring, risk-takers, and thoughtful thinkers. They have a charismatic appeal. But charisma
alone is insufficient for changing the way an organization operates. For bringing major
changes, transformational leaders must exhibit the following four factors:
Idealized influence: Provide vision as sense of mission, instills pride, gains respect and trust.
Inspirational motivation: Communicates high expectations, uses symbols to focus efforts,
and expresses important purposes in simple ways.
Intellectual Stimulation: Promotes intelligence, rationality, and careful problem solving.
Individualized Consideration: Gives personal attention, treats each employee individually,
coaches and advises.
Difference between Transactional and Transformational leaders
Transactional Transformational
Leadership is responsive Leadership is proactive
Works within the organizational culture
Work to change the organizational culture by
implementing new ideas
Transactional leaders make employees
achieve organizational objectives through
Transformational leaders motivate and
empower employees to achieve companys
rewards and punishment objectives by appealing to higher ideals and
moral values
Motivates followers by appealing to their
own self-interest
Motivates followers by encouraging them to
transcend their own interests for those of the
group or unit

Teams and Team Work
Understanding Team
A team is a group of individuals, all working together for a common purpose. The individuals
comprising a team ideally should have common goals, common objectives and more or less
think on the same lines. They should all work together and strive towards the achievement of
a common goal. Individuals who are not compatible with each other can never form a team.
They should have similar, if not the same, interests, thought processes, attitude, perception
and likings. The team members must complement each other and work in unison. Personal
interests must take a back seat and all of them must deliver their level best to achieve the
team objective.
Types of Team
Permanent teams: These teams perform on a permanent basis and are not dissolved once the
task is accomplished. Let us understand the concept with an example.
Mike, Peter, Joe and Ana had a strong inclination towards branding as well as promotions
and hence were a part of the branding team with a leading organization. They were primarily
responsible for promoting their brand and designing marketing strategies to generate
maximum revenue for their organization. They worked extremely hard and always managed
to achieve their targets well in advance, but their team was always in place and never
dissolved. Their organization never asked them to leave or ever dissolved their team. Such
teams are called permanent teams.
Work or no work, the human resources team, operation team, administration team always
function effectively throughout the year and hence are permanent teams.
Temporary teams - Unlike permanent teams, temporary teams lose their importance, once
the task is accomplished. Such teams are usually formed for a shorter duration either to assist
the permanent team or work when the members of the permanent team are busy in some other
project.
When organizations have excess of work, they generally form temporary teams which work
in association with the members of the permanent team for the accomplishment of the task
within the stipulated time.
Task Force/Project Team - Such teams are formed for a special purpose of working on any
specific project or finding a solution to a very critical problem.
The government generally appoints special teams to investigate critical issues like bomb
blasts, terrorist attacks and so on. The task force explores all the possible reasons which led to
a severe problem and tries to resolve it within a given deadline.
Committee - Committees are generally formed to work on a particular assignment either
permanently or on a temporary basis. Individuals with common interests, more or less from
the same background, come together on a common platform to form a committee and work
on any matter.
To organize any cultural event, organizations generally make committees to raise funds,
invite celebrities and all the major tasks involved to successfully organize any event. The
committee members work together, design strategies to successfully accomplish the task.
In educational institutes, various committees are formed where students with a common
interest join hands to organize cultural events and various other activities required for the all
round development of students.
Organization/Work Force - Such groups are formed in organizations where team members
work together under the expert guidance of leader. A leader or a supervisor is generally
appointed among the members itself and he along with his team works hard to achieve a
common goal. The leader all through must stand by his team and extract the best out of each
team member. He must not underestimate any of his team members and take his team along
to avoid conflicts.
Self Managed Teams - Self Managed Teams consist of individuals who work together again
for a common purpose but without the supervision of any leader. Here as the name suggests
every individual is accountable for his individual performance. The team members of self
managed teams must respect each other and should never lose focus on their target. No leader
is appointed and the team members have to take their own responsibility. Individuals take the
initiative on their own and are their own guides and mentors.
Cross Functional Team - Let us understand this with the help of an example.
Maria and Andy both were part of the branding team. They got an assignment from their
superiors to be completed within two days. Unfortunately Andy met with an accident and was
advised complete bed rest. To avoid delays, Peter from the operations team was shifted to the
marketing team to assist Maria for the time being and form a team. Such teams are called
cross functional teams. Ideally the employees should be more or less on the same level to
avoid ego hassles. Individuals from different areas come and work together for a common
objective to form a cross functional team. In such teams, people from different areas, interests
and likings join hands to come out with a unique idea to successfully complete a task.
Virtual Teams - Virtual teams consist of individuals who are separated by distances and
connected through a network. Here individuals communicate with each other online through
internet. Sam at Los Angeles can form a team with Mandy at Mexico and Sara at Denver, all
working for a common objective. Such teams are helpful when employees need to connect
with each other and are located at different places.
Characteristics of a Team
A clear, elevating goal: This is a goal which should be communicated to all.
A result-driven structure: The goal is jointly decided by all the team members. They
should be fully committed towards achieving it.
Competent members: Each team member should have the required skill set in order to
achieve the team objectives.
Unified commitment: With the total commitment from team members, achieving
organizational goals becomes easier.
Support and recognition: Appreciation as well as appraisal is required to keep the
morale of the team high.
Principled leadership: Leadership defines a team. An able-bodied leadership can chart
the teams path to success.
Each team member trusts the judgment of others: Mutual trust and respect is highly
important for the team. This is the only way to achieve the organization goals.
The team has to be willing to take risks: Risk taking is an attitude which comes with
confidence. Confidence on yourself as well as on the team, besides the ability to face all
consequences.
Dissenting opinions are never ignored: In fact, they should be recorded in order to be
revisited in case the future situations dictate so.
Stages of Team Development
Team development creates a captivating atmosphere by encouraging co-operation, teamwork,
interdependence and by building trust among team members. There are four stages of team
development:
Forming: During the initial stage, the group forms and learns what sort of behavior is
acceptable to the group. By exploring what does and does not work, the group sets implicit
and explicit ground rules that cover the completion of specific tasks as well as general group
dynamics. By and large, this stage is a period of both orientation and acclimation.
Storming: As group members become more comfortable with one another, they may oppose
the formation of a group structure as they begin to assert their individual personalities.
Members often become hostile and even fight ground rules set during the forming stage.
Norming: At this time, the conflicts that arose in the previous stage are addressed and
hopefully resolved. Group unity emerges as members establish common goals, norms, and
ground rules. The group as a whole participates, not merely a few vocal members. Members
begin to voice personal opinions and develop close relationships.
Performing: Now that structural issues have been resolved, the group begins to operate as a
unit. The structure of the group now supports and eases group dynamics and performance.
The structure becomes a tool for the groups use instead of an issue to be fought over.
Members can redirect their efforts from the development of the group to using the groups
structure to complete the tasks at hand.
Adjourning: Finally, for temporary groups such as task forces, this is the time when the
group wraps up activities. With disbandment in mind, the groups focus shifts from high task
performance to closure. The attitude of members varies from excitement to depression.
Some key concepts
Team Norms:
Tells what is expected of you under certain situations.
Acceptable standards of behavior within a group that are shared by the groups members.
Acts as a means of influencing the behavior of the group members with a minimum of
external controls.
Team Cohesiveness
It is the degree to which group members are attracted to each other and are motivated to stay
in the group. The solidarity or cohesiveness of a team is an important indicator of how much
influence the group has over its individual members. The more cohesive the group the more
strongly members feel about belonging to it the greater its influence. If the members of a
group feel strongly attached to it, they are not likely to violate its norms. Highly cohesive
teams often have less tension and hostility and fewer misunderstandings than less cohesive
groups do. Additionally studies have found that cohesive groups tend to produce more
uniform output than less cohesive groups.
Relationship between group cohesiveness, performance norms and productivity:


Making Teams Effective
In reality a committee or task force is often the best way to pool the expertise of different
members of the organization and then channel their efforts toward effective problem solving
and decision making. In addition, these formal groups let members learn how their work
affects others, increasing all members willingness and ability to coordinate their work for the
organizations good. Also, committees can serve as incubators for young executives,
teaching them to think beyond the needs and concerns of their own work unit. Thus, the real
challenge is not to avoid formal groups but to learn how to use groups more effectively.
Guidelines for committees
Because committees differ greatly in their functions and activities one set of guidelines will
not be appropriate for all cases. For example, a highly directive committee responsible for
communicating instructions from top management to subordinates should be managed
differently from a committee whose major task is to solve complex managerial problems. The
following suggestions apply to problem solving committees, which must be managed flexibly
if their members skills are to be used most effectively.
Several formal procedures are useful in helping committees operate effectively.
1. The committees goals should be clearly defined, preferably in writing. This will focus the
committees activities and focus discussion of what the committee is supposed to do.
2. The committees authority should be specified. Is the committee merely to investigate,
advice and recommend, or is it authorized to implement decisions?
3. The optimum size of the committee should be determined. With fewer than 5 members, the
advantages of teamwork may be diminished. Potential group resources increase as group size
increases. Size will vary according to circumstances, but for many tasks the ideal number of
committee members ranges from 5 to 10. With more than 10 to 15 members a committee
usually becomes unwieldy so that it is difficult for each member to influence the work.
4. A chairperson should be selected on the basis of his or her ability to run an efficient
meeting that is, to encourage the participation of all committee members, to keep meetings
from getting bogged down in irrelevancies and to see that the necessary paperwork gets done.
Appointing a permanent secretary to handle communications is often useful.
5. The agenda and all supporting material for the meeting should be distributed to members
before the meetings to permit them to prepare in advance. This makes it more likely they will
be ready with informed contributions and will stick to the point.
6. Meetings should start and end on time. The time when they will end should be announced
at the outset.
Team Work
The sum of the efforts undertaken by each team member for the achievement of the teams
objective is called team work.
Steps for a better team work:
Think about the team first
Never underestimate a team member
Communicate and Discuss
Avoid criticism
Transparency must be maintained and healthy interaction must be promoted among the
team members
The team leader must take the responsibility of encouraging the team members
Avoid conflicts in the team
Acknowledge and reward good work
Team Building
It is a process which utilizes high interaction group activities to increase trust and
openness among team members.
It can be applied within the groups or at the intergroup level where the activities are
interdependent.
Activities considered in team building typically include goal setting, development of
interpersonal relations among team members, role analysis to clarify each members role
& responsibilities and team process analysis.
Team building can also address itself to clarifying each members role in the team.
Communication
The process of passing any information from one person to the other person with the aid of
some medium is termed as communication.
The first party who sends the information is called the sender and the second party who
receives the information, decodes the information and accordingly responds is called the
receiver or the recipient. Thus in simpler terms communication is simply a process where the
sender sends the information to the receiver for him to respond.
Types of communication:
Verbal Communication: words, speeches, presentations
Non Verbal Communication: Facial expressions, gestures, hand movements
Visual Communication: signboards, displays, hoardings, banners, maps
Interpersonal Communication Process
Communication is a process of exchanging verbal and non verbal messages. It is a continuous
process. Pre-requisite of communication is a message. This message must be conveyed
through some medium to the recipient. It is essential that this message must be understood by
the recipient in same terms as intended by the sender. He must respond within a time frame.
Thus, communication is a two way process and is incomplete without a feedback from the
recipient to the sender on how well the message is understood by him.
The main components of communication process are as follows:
Context: Communication is affected by the context in which it takes place. This context may
be physical, social, chronological or cultural. Every communication proceeds with context.
The sender chooses the message to communicate within a context.
Sender/Encoder: Sender is a person who sends the message. A sender makes use of symbols
(words or graphic or visual aids) to convey the message and produce the required response.
The views, background, approach, skills, competencies, and knowledge of the sender have a
great impact on the message. The verbal and non verbal symbols chosen are essential in
ascertaining interpretation of the message by the recipient in the same terms as intended by
the sender.
Message: Message is a key idea that the sender wants to communicate. It is a sign that elicits
the response of recipient. Communication process begins with deciding about the message to
be conveyed. It must be ensured that the main objective of the message is clear.
Medium/Channel: Medium is a mean used to exchange/transmit the message. The sender
must choose an appropriate medium for transmitting the message else the message might not
be conveyed to the desired recipient. The choice of appropriate medium of communication is
essential for making the message effective and correctly interpreted by the recipient. This
choice of communication medium varies depending upon the features of communication. For
instance - written medium is chosen when a message has to be conveyed to a small group of
people, while an oral medium is chosen when spontaneous feedback is required from the
recipient.
Recipient/Decoder: Recipient is a person for whom the message is intended/aimed/targeted.
The degree to which the decoder understands the message is dependent upon various factors
such as knowledge of recipient, his responsiveness to the message, and the reliance of
encoder on decoder.
Feedback: Feedback is the main component of communication process as it permits the
sender to analyze the efficacy of the message. It helps the sender in confirming the correct
interpretation of message by the decoder. Feedback may be verbal (through words) or non-
verbal (in form of smiles, sighs, etc.). It may take written form also in form of memos,
reports, etc.


Importance of Effective Communication
1. Communication promotes motivation by informing and clarifying the employees about
the task to be done, the manner they are performing the task, and how to improve their
performance if it is not up to the mark.
2. Communication is a source of information to the organizational members for decision-
making process as it helps identifying and assessing alternative course of actions.
3. Communication plays a crucial role in altering individuals attitudes, i.e., a well informed
individual will have better attitude than a less-informed individual.
4. Communication also assists in the controlling process.
Improving Communication Process
An effective and efficient communication system requires managerial proficiency in
delivering and receiving messages. A manager must discover various barriers to
communication, analyze the reasons for their occurrence and take preventive steps to avoid
those barriers. Thus, the primary responsibility of a manager is to constantly develop,
maintain and improve the communication process in the organization.
Following are the ways to overcome communication barriers:
1. Eliminating differences in perception
2. Use of Simple Language
3. Reduction and elimination of noise levels
4. Active Listening
5. Stable Emotional State
6. Simple Organizational Structure
7. Avoid Information Overload
8. Give Constructive Feedback
9. Proper Media Selection
10. Flexibility in meeting the targets

Communication in Organizations
Downward Flow of Communication: Communication that flows from a higher level in an
organization to a lower level is a downward communication. In other words, communication
from superiors to subordinates in a chain of command is a downward communication. This
communication flow is used by the managers to transmit work-related information to the
employees at lower levels. Employees require this information for performing their jobs and
for meeting the expectations of their managers. Downward communication is used by the
managers for the following purposes:
Providing feedback on employees performance
Giving job instructions
Communicating the organizations mission and vision to the employees
Highlighting the areas of attention
Organizational publications, circulars, letter to employees, group meetings etc. are all
examples of downward communication.
Upward Flow of Communication: Communication that flows to a higher level in an
organization is called upward communication. It provides feedback on how well the
organization is functioning. The subordinates use upward communication to convey their
problems and performances to their superiors. They also use upward communication to tell
how well they have understood the downward communication. It can also be used by the
employees to share their views and ideas and to participate in the decision-making process.
The managers also get to know about the employees feelings towards their jobs, peers,
supervisor and organization in general. Managers can thus accordingly take actions for
improving things.
Grievance Redressal System, Complaint and Suggestion Box, Job Satisfaction surveys etc. all
help in improving upward communication.
Lateral / Horizontal Communication: Communication that takes place at same levels of
hierarchy in an organization is called lateral communication, i.e., communication between
peers, between managers at same levels or between any horizontally equivalent
organizational member. The advantages of horizontal communication are as follows:
It facilitates co-ordination of the task.
It facilitates co-operation among team members.
It provides emotional and social assistance to the organizational members.
It helps in solving various organizational problems.
It is a means of information sharing
It can also be used for resolving conflicts of a department with other department or
conflicts within a department.
Diagonal Communication: Communication that takes place between a manager and
employees of other workgroups is called diagonal communication. It generally does not
appear on organizational chart. For instance - To design a training module, a training
manager interacts with operations personnel to enquire about the way they perform their task.
External Communication: Communication that takes place between a manager and external
groups such as - suppliers, vendors, banks, financial institutes etc. For instance - To raise
capital, the managing director would interact with a bank manager.
Grapevine: This is an informal channel of communication. It is called so because it stretches
throughout the organization in all directions irrespective of the authority levels. Despite
existence of formal channels in an organization, the informal channels tend to develop when
he interacts with other people in organization. It exists more at lower levels of organization.