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4.1 Concept of Management, Modern

approaches to management
Management
Management defination
• Management is a process of planning, decision making, organizing,
leading, motivation and controlling the human resources, financial,
physical, and information resources of an organization to reach its
goals efficiently and effectively.
• Management is also concerned with being effective, completing
activities so that organizational goals are attained. Effectiveness is
often described as “doing the right things”—that is, doing those work
activities that will help the organization reach its goals.
What managers do? What is management?
• Simply speaking, management is what managers do. But that simple
statement doesn’t tell us much, does it? Let’s look first at what
management is before discussing more specifically what managers do.
• Management involves coordinating and overseeing the work activities of
others so that their activities/goal are completed efficiently and effectively.
We already know that coordinating and overseeing the work of others is
what distinguishes a managerial position from a non managerial one.
However, this doesn’t mean that managers can do what they want
anytime, anywhere, or in any way. Instead, management involves ensuring
that work activities are completed efficiently and effectively by the people
responsible for doing them, or at least that’s what managers aspire to do.
• Efficiency refers to getting the most output from the least amount of
inputs. Because managers deal with scarce inputs—including
resources such as people, money, and equipment—they’re concerned
with the efficient use of those resources. It’s often referred to as
“doing things right”—that is, not wasting resources.
• Management is also concerned with being effective, completing
activities so that organizational goals are attained. Effectiveness is
often described as “doing the right things”—that is, doing those work
activities that will help the organization reach its goals.
Management Functions/objectives
• According to the functions approach, managers perform certain activities
or functions as they efficiently and effectively coordinate the work of
others. What are these functions?
• Henri Fayol, a French businessman, first proposed in the early part of the
twentieth century that all managers perform five functions: planning,
organizing, commanding, coordinating, and controlling.
• Today, these functions have been condensed to four:
• 1. planning
• 2. organizing (structuring)
• 3. leading (motivation, leadership,pay) and
• 4. controlling
Management function
• 1. Planning-Management function that involves setting goals,
establishing strategies for achieving those goals, and developing plans
to integrate and coordinate activities
• 2. Organizing Management function that involves arranging and
structuring work to accomplish the organization’s goals
• 3. Leading Management function that involves working with and
through people to accomplish organizational goals. It also involves
motivation, leadership, pay structure, training, development
• 4. Controlling Management function that involves monitoring,
comparing, and correcting work performance
1. Planning
• it is the basic function of management. It deals with chalking out a future
course of action & deciding in advance the most appropriate course of
actions for achievement of pre-determined goals. planning involves
defining the organization’s goals, establishing strategies for achieving those
goals, and developing plans to integrate and coordinate work activities. It’s
concerned with both ends (what) and means (how). A plan is a future
course of actions. It is an exercise in problem solving & decision making.
Planning is determination of courses of action to achieve desired goals.
Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals, vision, mission, objectives
• Planning is necessary to ensure proper utilization of human & non-human
resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.
2. Designing/organization structure/organizing
• organizing as arranging and structuring work to accomplish
organizational goals. It’s an important process during which managers
design an organization’s structure. Organizational structure is the
formal arrangement of jobs within an organization. This structure,
which can be shown visually in an organizational chart, also serves
many purposes. (See Exhibit 10-1.)
• When managers create or change the structure, they’re engaged in
organizational design, a process that involves decisions about six key
elements: 1.work specialization, 2. departmentalization, 3. chain of
command, 4. span of control, 5. centralization and decentralization,
and 6. formalization.
Designing/organization structure/organizing
1. Work Specialization-work specialization, which is dividing work
activities into separate job tasks. Individual employees “specialize” in
doing part of an activity rather than the entire activity in order to
increase work output. It’s also known as division of labor, a concept we
introduced in the management history module.
2. Departmentalization-How jobs are grouped together is called
departmentalization. Five common forms of departmentalization are
used, although an organization may develop its own unique
classification. (For instance, a hotel might have departments such as
front desk operations, sales and catering, housekeeping and laundry,
and maintenance.). Human resource, finance, treasury, credit, etc
3. Chain of Command -The chain of command is the line of authority extending
from upper organizational levels to lower levels, which clarifies who reports to
whom. Managers need to consider it when organizing work because it helps
employees with questions such as “Who do I report to?” or “Who do I go to if I
have a problem?” To understand the chain of command, you have to understand
three other important concepts: authority, responsibility, and unity of command.
• Authority refers to the rights inherent in a managerial position to tell people
what to do and to expect them to do it. Managers in the chain of command had
authority to do their job of coordinating and overseeing the work of others.
• UNITY OF COMMAND. Finally, the unity of command principle (one of Fayol’s 14
management principles) states that a person should report to only one manager
4. Span of Control-How many employees can a manager efficiently and effectively
manage? That’s what span of control is all about. The traditional view was that
managers could not—and should not— directly supervise more than five or six
subordinates. Determining the span of control is important because to a large
degree, it determines the number of levels and managers in an organization—an
important consideration in how efficient an organization will be. All other things
being equal, the wider or larger the span, the more efficient an organization is.
5. Centralization and Decentralization- Centralization is the degree to which
decision making takes place at upper levels of the organization. If top managers
make key decisions with little input from below, then the organization is more
centralized. On the other hand, the more that lower-level employees provide input
or actually make decisions, the more decentralization there is. Keep in mind that
centralization-decentralization is not an either-or concept. The decision is relative,
not absolute—that is, an organization is never completely centralized or
decentralized
6. Formalization-Formalization refers to how standardized an
organization’s jobs are and the extent to which employee behavior is
guided by rules and procedures. In highly formalized organizations,
there are explicit job descriptions, numerous organizational rules, and
clearly defined procedures covering work processes. Employees have
little discretion over what’s done, when it’s done, and how it’s done.
However, where formalization is low, employees have more discretion
in how they do their work
Todays organization structure
CURRENT ISSUES IN MANAGEMENT (CHANGE
MANAGEMENT)
Features of Management
• Some of the key features of management include:
1. Goal Orientation: Management is inherently goal-oriented, focusing on achieving specific objectives or targets within the organization.
2. Integration of Resources: Management involves the effective coordination and integration of various resources such as human, financial, material, and informational resources to accomplish
organizational goals.
3. Decision Making: Managers are responsible for making decisions at various levels of the organization, ranging from strategic decisions that affect the entire organization to operational decisions that
impact daily activities.
4. Planning: Planning involves setting objectives, identifying actions to achieve those objectives, and developing strategies to guide organizational activities. It is a fundamental function of management
that provides direction and purpose.
5. Organizing: Organizing involves structuring the resources of the organization, including people, tasks, and processes, to facilitate the achievement of goals. This includes designing roles,
responsibilities, and relationships within the organization.
6. Leading: Leading involves influencing and motivating employees to work towards organizational goals. Effective leadership inspires commitment, fosters innovation, and encourages employee
development.
7. Controlling: Controlling involves monitoring performance, comparing actual results to planned objectives, and taking corrective action when necessary. It ensures that organizational activities are on
track and aligned with established goals.
8. Problem Solving: Management involves identifying and addressing challenges and problems that arise within the organization. This requires analytical skills, creativity, and the ability to implement
solutions effectively.
9. Adaptability: Management must be adaptable to changing internal and external environments. It requires flexibility and the ability to adjust strategies and tactics in response to new opportunities or
challenges.
10. Communication: Effective communication is essential for successful management. Managers must be able to convey information clearly, listen actively, and foster open communication channels
within the organization.
11. Ethical Responsibility: Management involves making decisions that consider ethical considerations and social responsibility. This includes treating employees fairly, acting with integrity, and
considering the impact of decisions on stakeholders and society.
12. Continuous Improvement: Management is a dynamic process that emphasizes continuous improvement and learning. It involves evaluating performance, identifying areas for enhancement, and
implementing changes to enhance organizational effectiveness.
• These features collectively contribute to the effective functioning of organizations and enable managers to achieve desired outcomes while navigating complex business environments.
Challanges of management
• Management faces numerous challenges in today's dynamic business environment. Some of the key challenges include:
1. Globalization: Operating in a globalized economy brings complexities such as cultural differences, varying regulations, and supply chain challenges.
2. Technological Disruption: Rapid advancements in technology require constant adaptation. Managers must navigate issues like cybersecurity, digital
transformation, and leveraging emerging technologies like AI and automation.
3. Workforce Diversity: Managing diverse teams with employees from different generations, backgrounds, and cultures requires inclusive leadership and effective
communication strategies.
4. Talent Management: Recruiting, retaining, and developing skilled employees is a challenge in competitive industries. Managers must focus on fostering a positive
work culture and providing opportunities for growth.
5. Agility and Adaptability: Businesses need to be agile and adaptable to respond to market changes quickly. This requires flexible management practices and the
ability to pivot strategies when necessary.
6. Ethical and Social Responsibility: Companies face increasing pressure to operate ethically and sustainably. Managers must consider the social and
environmental impact of their decisions while balancing the interests of stakeholders.
7. Data Management: With the abundance of data available, managers must effectively collect, analyze, and utilize data to make informed decisions and gain a
competitive edge.
8. Change Management: Implementing organizational changes, whether it's a restructuring, new technology adoption, or cultural shift, requires effective change
management strategies to mitigate resistance and ensure successful implementation.
9. Leadership Development: Developing strong leadership at all levels of the organization is crucial for driving innovation, motivating employees, and achieving
strategic objectives.
10. Regulatory Compliance: Businesses must comply with various regulations and laws, which can be complex and constantly evolving. Managers need to stay
updated on compliance requirements and ensure their teams adhere to them.
11. Supply Chain Disruptions: Events like natural disasters, political unrest, and global health crises can disrupt supply chains. Managers need contingency plans
and risk mitigation strategies to minimize the impact on operations.
12. Competition: Fierce competition requires managers to constantly innovate, differentiate their products or services, and stay ahead of competitors in the market.
• Addressing these challenges requires a combination of strategic planning, effective communication, adaptability, and continuous learning.
Management Theories
• In 1776, Adam Smith published The Wealth of Nations, in which he argued the
economic advantages that organizations and society would gain from the division
of labor (or job specialization)—that is, breaking down jobs into narrow and
repetitive tasks. Using the pin industry as an example, Smith claimed that 10
individuals, each doing a specialized task, could produce about 48,000 pins a day
among them. However, if each person worked alone performing each task
separately, it would be quite an accomplishment to produce even 10 pins a day!
• Starting in the late eighteenth century when machine power was substituted for
human power, a point in history known as the industrial revolution, it became
more economical to manufacture goods in factories rather than at home. These
large efficient factories needed someone to forecast demand, ensure that enough
material was on hand to make products, assign tasks to people, direct daily
activities, and so forth. That “someone” was a manager:
• These first studies of management, often called the classical approach,
emphasized rationality and making organizations and workers as efficient
as possible.
• Two major theories comprise the classical approach:
• scientific management and
• general administrative theory.
• The two most important contributors to scientific management theory
were Frederick W. Taylor and the husband-wife team of Frank and Lillian
Gilbreth.
• The two most important contributors to general administrative theory
were Henri Fayol and Max Weber.
Scientific management
• Frederick W. Taylor is known as the father of scientific management.
This branch of classical theory focuses on scientific methods and
empirical research to examine the most effective methods to
accomplish specific tasks. It aims to extract the best out of every
employee by assigning jobs based on employee skill set and
competency. Workflow is divided between managers and employees.
Managers strategize, train and monitor employees; employees
perform their assigned roles.
Keys to Scientific Management
• Develop a science for each element of an individual’s work to replace
the old rule-of- thumb method.
• Scientifically select and then train, teach, and develop the worker.
• Heartily cooperate with the workers so as to ensure that all work is
done in accordance with the principles of the science that has been
developed.
• Divide work and responsibility almost equally between management
and workers.
• Management does all work for which it is better suited than the
workers.
General administrative theory
• General administrative theory focused more on what managers do and
what constituted good management practice. We introduced Henri Fayol
inititally because he first identified five functions that managers perform:
planning, with first-line managers and the scientific method, Fayol’s
attention was directed at the activities of all managers. He wrote from his
personal experience as the managing director of a large French coal-mining
firm.
• Fayol described the practice of management as something distinct from
accounting, finance, production, distribution, and other typical business
functions. His belief that management was an activity common to all
business endeavors, government, and even the home led him to develop
14 principles of management—fundamental rules of management that
could be applied to all organizational situations and taught in schools.
BUREAUCRATIC MANAGEMENT APPROACH
UNDER GENERAL ADMINISTRATIVE THEORY
• The father of modern sociology, Max Weber, developed the branch
called bureaucratic management. According to this branch of classical
theory, an ideal organization, or bureaucracy, has a hierarchical
structure of management with clearly defined rules and regulations.
Labor is divided and relationships are impersonal. This ensures order
and uniformity throughout an organization, producing a specialized
workforce.
• Although the classical theory of management is not prevalent in the
modern age, certain principles and branches of the classical
theory still find use in today’s organizations, especially Weber’s
principles of bureaucratic management.
Behavioural Approach
• The field of study that researches the actions (behavior) of people at
work is called organizational behavior (OB). Much of what managers
do today when managing people—motivating, leading, building trust,
working with a team, managing conflict, and so forth—has come out
of OB research.
• Modern Approach to Management: Quantitative Approach, System
Approach, Contingency Approach and Other Approach
Quantitative Approach
• The quantitative approach evolved from mathematical and statistical solutions developed for
military problems during World War II. After the war was over, many of these techniques used for
military problems were applied to businesses. For example, one group of military officers,
nicknamed the Whiz Kids, joined Ford Motor Company in the mid-1940s and immediately began
using statistical methods and quantitative models to improve decision making.
• It uses tools like
• (i) Theory of Probability, (ii) Sampling Analysis, (iii) Correlation / Regression Analysis,
• (iv) Time Series Analysis,
• (v) Ratio Analysis,
• (vi) Variance Analysis,
• (vii) Statistical Quality Control,
• (viii) Linear Programming, game theory and others for continuous improvement.
• Total quality management, or TQM, is a management philosophy devoted to continual
improvement and responding to customer needs and expectations. (See Exhibit MH-6.)
• Continual improvement isn’t possible without accurate
measurements, which require statistical techniques that measure
every critical variable in the organization’s work processes. These
measurements are compared against standards to identify and
correct problems.
• The quantitative approach contributes directly to management
decision making in the areas of planning and control. For instance,
when managers make budgeting, queuing, scheduling, quality
control, and similar decisions, they typically rely on quantitative
techniques.
System Approach
• A system is a set of interrelated and interdependent parts arranged in a manner that
produces a unified whole. The two basic types of systems are closed and open. Closed
systems are not influenced by and do not interact with their environment. In contrast,
open systems are influenced by and do interact with their environment.
• Today, when we describe organizations as systems, we mean open systems. Exhibit MH-7
shows a diagram of an organization from an open systems perspective. As you can see,
an organization takes in inputs (resources) from the environment and transforms or
processes these resources into outputs that are distributed into the environment. The
organization is “open” to and interacts with its environment.
• They ensure that all these parts are working together so the organization’s goals can be
achieved. For example, the systems approach recognizes that, no matter how efficient
the production department might be, the marketing department must anticipate
changes in customer tastes and work with the product development department in
creating products customers want or the organization’s overall performance will suffer.
Contemprorary Approach-System Approach
• In addition, the systems approach implies that decisions and actions
in one organizational area will affect other areas. For example, if the
purchasing department doesn’t acquire the right quantity and quality
of inputs, the production department won’t be able to do its job.
• Finally, the systems approach recognizes that organizations are not
self- contained. They rely on their environment for essential inputs
and as outlets to absorb their outputs. No organization can survive for
long if it ignores government regulations, supplier relations, or the
varied external constituencies upon which it depends.
Contingency Approach
• The contingency approach (sometimes called the situational approach)
says that organizations are different, face different situations
(contingencies), and require different ways of managing.
• A good way to describe contingency is “if, then.” If this is the way my
situation is, then this is the best way for me to manage in this situation. It’s
intuitively logical because organizations and even units within the same
organization differ—in size, goals, work activities, and the like. It would be
surprising to find universally applicable management rules that would work
in all situations. But, of course, it’s one thing to say that the way to manage
“depends on the situation” and another to say what the situation is.
Management researchers continue working to identify these situational
variables.
• The contingency approach, often called the Situational Approach is based
upon the premise that all management is essentially situational in nature.
All decisions by managers will be affected (if not controlled) by the
contingencies of a given situation.
• There is no one good way to address any decision. Contingencies arise from
various environmental factors. As such, managers must take into account
these contingencies when making decisions that affect the organization.
• Contingency theory builds upon accepted elements of System Theory. It
recognized that an organization is an open system made up of interrelated
sub-units. It adds, however, that the behavior of individual sub-units is
contingent upon internal and external environmental contingencies.
What are the primary characteristics of the
Contingency Approach?
• The primary characteristics of contingency theory include:
• Non-universality of management theory - There is no one best way of doing
things.
• Contingency - Management decision making is contingent upon the situation.
• Environment - Managerial policies and practices to be effective, must adjust to
changes in the environment.
• Diagnostics - Managers must possess and continue to improve diagnostic skills so
as to anticipate and ready for environmental changes.
• Human Relations - Managers should have sufficient human relations skills to
accommodate and stabilize change.
• Information and Communication - Managers must develop a communication
system adequate to deal with environmental changes.
• 4.2 Vision, Mission, Goal, Objectives, Targets, Strategies, Organization
Structure, Authority and Power Delegation, Leadership, Control,
Coordination, Motivation, Teamwork and Group Dynamics
• 4.6 Corporate and strategic planning and management, corporate
social responsibility,
• Ethics, Integrity and responsibility in business/service like institution
Concept of Strategic Management
• Strategic management is a set of managerial decisions and actions
that determines the long- run performance of a corporation.
• It includes environmental scanning (both external and internal),
strategy formulation (strategic or long-range planning), strategy
implementation, and evaluation and control.
• The study of strategic management, therefore, emphasizes the
monitoring and evaluating of external opportunities and threats in
light of a corporation’s strengths and weaknesses.
• Originally called business policy, strategic management incorporates
such topics as strategic planning, environmental scanning, and
industry analysis.
Benefits of Strategic Management
• Research reveals that organizations that engage in strategic
management generally out- perform those that do not.
• The attainment of an appropriate match, or “fit,” between an
organization’s environment and its strategy, structure, and processes
has positive effects on the organization’s performance.
• Strategic planning becomes increasingly important as the
environment becomes more unstable.
• For example,
Benefits of Strategic Management
• A survey of nearly 50 corporations in a variety of countries and
industries found the three most highly rated benefits of strategic
management to be:
• Clearer sense of strategic vision for the firm.
• Sharper focus on what is strategically important.
• Improved understanding of a rapidly changing environment.
Benefits of Strategic Management
• To be effective, however, strategic management need not always be a
formal process. It can begin with a few simple questions:
• 1. Where is the organization now? (Not where do we hope it is!)
• 2. If no changes are made, where will the organization be in one year?
two years? five years? 10 years? Are the answers acceptable?
• 3. If the answers are not acceptable, what specific actions should
management undertake? What are the risks and payoffs involved?
Elements/ Steps of Strategic Management/
Strategic Planning
• Strategic management consists of four basic elements:
• Environmental scanning
• Strategy formulation
• Strategy implementation
• Evaluation and control
• It is also called the basic model of the strategic management
Elements of Strategic Management
Elements of Strategic Management
• It is a planning model that presents what a corporation should do in
terms of the strategic management process, not what any particular
firm may actually do.
• The rational planning model predicts that as environmental
uncertainty increases, corporations that work more diligently to
analyze and predict more accurately the changing situation in which
they operate will outperform those that do not.
• Empirical research studies support this model.
1. ENVIRONMENTAL SCANNING

• Environmental scanning is the monitoring, evaluating, and disseminating of

information from the external and internal environments to key people within the
corporation.
• Its purpose is to identify strategic factors—those external and internal elements
that will determine the future of the corporation.
• The simplest way to conduct environmental scanning is through SWOT analysis.
• SWOT is an acronym used to describe the particular Strengths, Weaknesses,
Opportunities, and Threats that are strategic factors for a specific company.
• The external environment consists of variables (Opportunities and Threats) that
are outside the organization and not typically within the short-run control of top
management. These variables form the context within which the corporation
exists.
SWOT NTC
• Internal
• S=Strengths-large capital
• Less competition
• Strong brand
• Good infrastructure
• Facilities in rural
• Competent human resource, large market network
• W=Weakness
• Late cusomer service
• Slow expansion of
• Infra issues, bureauricratic culture
• External-PESTAL/ STEEP
• Oppertunities= 5g,6g
• Global expansion
• Lare domestic market
• Governemnt support
• Threats
• High competition
• Political instability
• Change customer demand, rules and regualtion
1. ENVIRONMENTAL SCANNING
• The internal environment of a corporation consists of variables
(Strengths and Weaknesses) that are within the organization itself
and are not usually within the short-run control of top management.
• These variables form the context in which work is done. They include
the corporation’s structure, culture, and resources.
• Key strengths form a set of core competencies that the corporation
can use to gain competitive advantage.
Scanning the Societal Environment:
STEEP/PESTEL Analysis
• STEEP Analysis, the scanning of Sociocultural, Technological,
Economic, Ecological, and Political-legal environmental forces. (It may
also be called PESTEL Analysis for Political, Economic, Sociocultural,
Technological, Ecological, and Legal forces.)
2. STRATEGY FORMULATION
• Strategy formulation is the development of long-range plans for the
effective management of environmental opportunities and threats, in
light of corporate strengths and weaknesses (SWOT).
• It includes defining the corporate mission, specifying achievable
objectives, developing strategies, and setting policy guidelines.
• Research reveals that firms with mission statements containing
explicit descriptions of customers served and technologies used have
significantly higher growth than firms without such statements.
• Vision
• Vision of Nepal Telecom is to remain a dominant player in
telecommunication sector in the country while also extending reliable and
cost-effective services to all.
• Mission
• Nepal Telecom, as a progressive, customer-spirited and consumer-
responsive entity, is committed to provide nationwide reliable
telecommunication service to serve as an impetus to the social, political
and economic development of the country.
• Goal
• Goal of Nepal Telecom is to provide cost-effective telecommunication
services to every nook and corner of the country.
• A Vision Statement describes the desired future position of the
company in vague.
• A Mission Statement defines the company’s business, its objectives
and its approach to reach those objectives.
• Elements of Mission and Vision Statements are often combined to
provide a statement of the company’s purposes, goals and values.
However, sometimes the two terms are used interchangeably.
Mission
• A mission statement may also include the firm’s values and philosophy
about how it does business and treats its employees. It puts into words not
only what the company is now but what it wants to become—
management’s strategic vision of the firm’s future.
• Some people like to consider vision and mission as two different concepts:
Mission describes what the organization is now; vision describes what the
organization would like to become. We prefer to combine these ideas
into a single mission statement.
• One example of a mission statement is that of Google:
To organize the world’s information and make it universally accessible and
useful.
Mission
• A mission may be defined narrowly or broadly in scope.
• An example of a broad mission statement is that used by many
corporations: “Serve the best interests of shareowners, customers, and
employees.”
• A broadly defined mission statement such as this keeps the company from
restricting itself to one field or product line, but it fails to clearly identify
either what it makes or which products/markets it plans to emphasize.
• A narrow mission very clearly states the organi- zation’s primary business,
but it may limit the scope of the firm’s activities in terms of the product or
service offered, the technology used, and the market served
Objectives vs. Goals
• Objectives are the end results of planned activity. They should best
be stated as action verbs and tell what is to be accomplished by
when and quantified if possible.
• The achievement of corporate objectives should result in the
fulfillment of a corporation’s mission.
• For example, by providing society with gums, candy, iced tea, and
carbonated drinks, Cadbury, has become the world’s largest
confectioner by sales. One of its prime objectives is to increase sales
4%–6%eachyear.
• The term goal is often used interchangeably with the term objective
Objectives Vs. Goal
• However, we prefer to differentiate the two terms.
• In contrast to an objective, we consider a goal as an open- ended
statement of what one wants to accomplish, with no quantification
of what is to be achieved and no time criteria for completion.
• For example, a simple statement of “increased profitability” is thus a
goal, not an objective because it does not state how much profit the
firm wants to make the next year. A good objective should be action-
oriented and begin with the word to.
• An example of an objective is “to increase the firm’s profitability in
2024 by 10% over 2023.”
Objectives
• Some of the areas in which a corporation might establish its goals and
objectives are:
• Profitability (net profits), Efficiency (low costs, etc.)
• Growth (increase in total assets, sales, etc.), Shareholder wealth (dividends
plus stock price appreciation)
• Utilization of resources (ROE or ROI) , Reputation (being considered a
“top” firm
• Contributions to employees (employment security, wages, diversity)
• Contributions to society (taxes paid, participation in charities, providing a
needed product or service), Market leadership (market share)
Nepal Telecom
• Vision, Mission & Goal
• Vision
• Vision of Nepal Telecom is to remain a dominant player in telecommunication sector in the country while
also extending reliable and cost-effective services to all.
• Mission

• Nepal Telecom, as a progressive, customer-spirited and consumer-responsive entity, is committed to

provide nationwide reliable telecommunication service to serve as an impetus to the social, political and
economic development of the country.
• Goal
• Goal of Nepal Telecom is to provide cost-effective telecommunication services to every nook and corner
of the country.
• Objective (assuming)
• To reduce cost of IT department by 5% at the end of year.
Strategies
• A strategy of a corporation forms a comprehensive master plan that
states how the corporation will achieve its mission and objectives.
• It maximizes competitive advantage and minimizes competitive
disadvantage. For example, even though Cadbury Schweppes was a
major competitor in confectionary and soft drinks, it was not likely to
achieve its challenging objective of significantly increasing its profit
margin within four years without making a major change in strategy.
• Management therefore decided to cut costs by closing 33 factories
and reducing staff by 10%. It also made the strategic decision to
concentrate on the confectionary business by divesting its less-
profitable
Strategies
• The typical business firm usually considers three types of strategy:
corporate, business, and functional.
• 1. Corporate strategy: describes a company’s overall direction in
terms of its general attitude toward growth and the management of
its various businesses and product lines.
• Corporate strategies typically fit within the three main categories of
stability, growth, and retrenchment.
• Cadbury Schweppes, for example, was following a corporate strategy
of retrenchment by selling its marginally profitable soft drink business
and concentrating on its very successful confectionary business.
Strategies
• 2. Business strategy: usually occurs at the business unit or product
level, and it emphasizes improvement of the competitive position of a
corporation’s products or services in the specific industry or market
segment served by that business unit.
• Business strategies may fit within the two overall categories,
competitive and cooperative strategies.
• British Airways has followed a cooperative strategy by forming an
alliance with American Airlines in order to provide global service
Strategies
• 3. Functional strategy is the approach taken by a functional area (unit) to
achieve corporate and business unit objectives and strategies by
maximizing resource productivity.
• It is concerned with developing and nurturing a distinctive competence to
provide a company or business unit with a competitive advantage.
Examples of research and development (R&D) functional strategies are
technological followership (imitation of the products of other companies)
and technological leadership (pioneering an innovation).
• For years, Magic Chef had been a successful appliance maker by spending
little on R& D but by quickly imitating the innovations of other competitors.
This helped the company to keep its costs lower than those of its
competitors and consequently to compete with lower prices.
Strategies
• Business firms use all three types of strategy simultaneously.
• A hierarchy of strategy is a grouping of strategy types by level in the
organization.
• Hierarchy of strategy is a nesting of one strategy within another so
that they complement and support one another. (See Figure 1–4)
• Functional strategies support business strategies, which, in turn,
support the corporate strategy(ies).
Policies
• A policy is a broad guideline for decision making that links the formulation
of a strategy with its implementation. Companies use policies to make sure
that employees throughout the firm make decisions and take actions that
support the corporation’s mission, objectives, and strategies.
• For example, when Cisco decided on a strategy of growth through
acquisitions, it established a policy to consider only companies with no
more than 75 employees, 75% of whom were engineers.
• Consider the following company policies:
• Southwest Airlines: Southwest offers no meals or reserved seating on
airplanes. (This supports Southwest’s competitive strategy of having the
lowest costs in the industry.)
STRATEGY IMPLEMENTATION
• Strategy implementation is a process by which strategies and policies
are put into action through the development of programs, budgets,
and procedures.
• This process might involve changes within the overall culture,
structure, and/or management system of the entire organization.
• Except when such drastic corporate wide changes are needed,
however, the implementation of strategy is typically conducted by
middle- and lower-level managers, with review by top management.
• Sometimes referred to as operational planning, strategy
implementation often involves day-to-day decisions in resource
allocation.
Programs
• A program is a statement of the activities or steps needed to
accomplish a single-use plan. It makes a strategy action oriented.
• It may involve restructuring the corporation, changing the company’s
internal culture, or beginning a new research effort.
• For example, Boeing’s strategy to regain industry leadership with its
proposed 787 Dream liner meant that the company had to increase
its manufacturing efficiency in order to keep the price low. To
significantly cut costs, management decided to implement a series of
programs:
Programs
• Outsource approximately 70% of manufacturing.
• Reduce final assembly time to three days (compared to 20 for its 737
plane) by having suppliers build completed plane sections.
• Use new, lightweight composite materials in place of aluminum to
reduce inspection time.
• Resolve poor relations with labor unions caused by downsizing and
outsourcing.
Programs
• Another example is a set of programs used by automaker BMW to
achieve its objective of increasing production efficiency by 5% each
year:
• (a) shorten new model development time from 60 to 30 months,
• (b) reduce preproduction time from a year to no more than five
months, and
• (c) build at least two vehicles in each plant so that production can
shift among models de- pending upon demand.
Budgets
• A budget is a statement of a corporation’s programs in terms of
NPR/dollars. Used in planning and control, a budget lists the detailed
cost of each program.
• Many corporations demand a certain percentage return on
investment, often called a “hurdle rate,” before management will
approve a new program. This ensures that the new program will
significantly add to the corporation’s profit performance and thus
build shareholder value.
• The budget thus not only serves as a detailed plan of the new strategy
in action, it also specifies through pro forma financial statements the
expected impact on the firm’s financial future.
Budgets
• For example, General Motors budgeted$4.3 billion to update and
expand its line of automobiles. With this money, the company was
able to increase the number of models from five to nine and to offer
more powerful engines, sportier handling, and edgier styling.
• The company reversed its declining market share by appealing to a
younger market.
Procedures
• Procedures, sometimes termed Standard Operating Procedures (SOP),
are a system of sequential steps or techniques that describe in detail
how a particular task or job is to be done.
• They typically detail the various activities that must be carried out in
order to complete the corporation’s program. For example, both UPS
and FedEx put such an emphasis on consistent, quality service that
both companies have strict rules for employee behavior, ranging from
how a driver dresses to how keys are held when approaching a
customer’s door.
EVALUATION AND CONTROL
• Evaluation and control is a process in which corporate activities and
performance results are monitored so that actual performance can be
compared with desired performance.
• Managers at all levels use the resulting information to take corrective
action and resolve problems. Although evaluation and control is the
final major element of strategic management, it can also pinpoint
weaknesses in previously implemented strategic plans and thus
stimulate the entire process to begin again.
EVALUATION AND CONTROL
• Performance is the end result of activities. It includes the actual
outcomes of the strategic management process. The practice of
strategic management is justified in terms of its ability to improve an
organization’s performance, typically measured in terms of profits
and return on investment. For evaluation and control to be effective,
managers must obtain clear, prompt, and unbiased information from
the people below them in the corporation’s hierarchy. Using this
information, managers compare what is actually happening with what
was originally planned in the formulation stage.
FEEDBACK/LEARNING PROCESS
• As a firm or business unit develops strategies, pro- grams, and the
like, it often must go back to revise or correct decisions made earlier
in the process. For example, poor performance (as measured in
evaluation and control) usually in- dicates that something has gone
wrong with either strategy formulation or implementation. It could
also mean that a key variable, such as a new competitor, was ignored
during environ- mental scanning and assessment.
Strategic Decision Making part of Strategic
Management
• The distinguishing characteristic of strategic management is its
emphasis on strategic decision making.
• As organizations grow larger and more complex, with more uncertain
environments, decisions become increasingly complicated and
difficult to make. In agreement with the strategic choice perspective
mentioned earlier, this book proposes a strategic decision-making
framework that can help people make these decisions regardless of
their level and function in the corporation.
WHAT MAKES A DECISION STRATEGIC
• Unlike many other decisions, strategic decisions deal with the long-
run future of an entire organization and have three characteristics:
• 1. Rare: Strategic decisions are unusual and typically have no
precedent to follow.
• 2. Consequential: Strategic decisions commit substantial resources
and demand a great deal of commitment from people at all levels.
• 3. Directive: Strategic decisions set precedents for lesser decisions
and future actions throughout an organization.
Elements of Strategic Decision Making
Process/elements of Strategic Planning
• Research indi- cates that the planning mode is not only more analytical and
less political than are the other modes, but it is also more appropriate for
dealing with complex, changing environments.86We therefore propose the
following eight-step strategic decision-making process to improve the
making of strategic decisions (see Figure 1–5):
• 1. Evaluate current performance results in terms of (a) return on
investment, profitabil- ity, and so forth, and (b) the current mission,
objectives, strategies, and policies.
• 2. Review corporate governance—that is, the performance of the firm’s
board of directors and top management.
• 3. Scan and assess the external environment to determine the strategic
factors that pose Opportunities and Threats.
Elements of Strategic Decision Making
Process
• 4. Scan and assess the internal corporate environment to determine
the strategic factors that are Strengths (especially core competencies)
and Weaknesses.
• 5. Analyze strategic (SWOT) factors to (a) pinpoint problem areas and
(b) review and re- vise the corporate mission and objectives, as
necessary.
• 6. Generate, evaluate, and select the best alternative strategy in
light of the analysis con- ducted in step 5. 7. Implement selected
strategies via programs, budgets, and procedures.
• 8. Evaluate implemented strategies via feedback systems, and the
control of activities to ensure their minimum deviation from plans.
Strategic Decision Making Process
Corporate social responsibility(CSR)
• Corporate Social Responsibility is a management concept
whereby companies integrate social and environmental concerns in their
business operations and interactions with their stakeholders. CSR is
generally understood as being the way through which a company achieves
a balance of economic, environmental and social imperatives (“Triple-
Bottom-Line- Approach”), while at the same time addressing the
expectations of shareholders and stakeholders. In this sense it is important
to draw a distinction between CSR, which can be a strategic business
management concept, and charity, sponsorships or philanthropy.
• Key CSR issues: environmental management, eco-efficiency, responsible
sourcing, stakeholder engagement, labour standards and working
conditions, employee and community relations, social equity, gender
balance, human rights, good corporate governance, and anti-corruption
measures.
• A properly implemented CSR concept can bring along a variety of
competitive advantages, such as enhanced access to capital and
markets, increased sales and profits, operational cost savings,
improved productivity and quality, efficient human resource base,
improved brand image and reputation, enhanced customer loyalty,
better decision making and risk management processes.
• The responsibility of implementing CSR is that of BOD, CEO,
Management Team and employee.
• Corporate Social Responsibility (CSR) is about building a socially responsible business
striving for social change along the line of seeking profits. The concept of CSR is
associated (but, not limited) with all the stakeholders like customers, employees,
investors, society and government. While all companies look for maximizing profit,
blending this ambition with social values and cultural responsibility helps in enhancing
the long term value creation of a business. Corporate houses can perform CSR of
different kinds and scale, which may or may not require an added investment.
• According to the latest directives of NRB, BFIs are required to create a CSR fund with a
minimum contribution of 1 percent of net profit to spend in the specified CSR heads in
the next fiscal year.

• Companies like Chaudhary Group, Nepal Telecom, Ncell, Panchakanya Group and
commercial banks mostly gain the limelight in the CSR scene of Nepal. Their consistency
in large scale CSR activities have helped them come in the forefront of CSR scenario in
Nepal.
Advantages of CSR:

• 1. It builds public trust

• 88% of consumers said they were more likely to spend money for a
company that supports and engages in activities to improve society.
By helping society, by either through donating money or volunteering,
the company gains trust from its consumers. In the long-term, the
company will become more and more popular. And one day, it may
get news coverage from press organizations, which is a hugh push on
the company’s public relations side. CSR builds a good reputation for
the company.
• 2. It enhances positive relationships
• As the company builds public trust, it also builds a sense of community
among its consumers. Even though communities aren’t directly connected
to the company by its CSR, they may end up being proud of it. Thus, CSR
can lead to a much healthier company-consumer relationship. Meanwhile,
internally, it also attracts and retains the employees. When corporations
exhibit philanthropic behaviors or are doing good for society, they are more
likely to provide employees with a positive workplace environment.
• As a result, they feel engaged and productive when they walk into work
each day. Many people, especially Millennials, prefer to work for a
company that has a high level of CSR. Hence, having a high CSR not only
attracts consumers externally, but also make its employers prouder
internally.
• 3. Sustainability
• This is one of the most important long-term benefits for a business.
CSR helps companies become more sustainable. One obvious way to
become socially responsible is to reduce carbon emissions and start
using renewable energy. Companies can also do it through
encouraging its workers to turn off devices when they are not using
them and turn off the lights and air conditioners after work. By
implementing this, the company can save a large amount of money
on its utility bills as well as getting recognized as being a socially
responsible company.
• 4. It increases profits
• Many people may think they have to make sacrifices in order to
increase their company’s CSR. In fact, there are many ways to
maximize profits while increasing CSR. As companies work to improve
their CSR, there are many additional benefits that come with that.
According to top CSR statistics, 55% of consumers are willing to pay
more for products from socially responsible companies. As a result,
profits will increase because higher CSR will attract more customers.
• 5. Encourage professional and personal growth
• When companies have a culture of corporate social responsibility,
they can easily promote volunteerism to their employees and
encourage them to donate to nonprofits. Employees are more likely
to become individually, philanthropically minded if their company
encourages that behavior. Meanwhile, employees know that their
employer is committed to bettering their local and global
communities. They will then feel more inclined to be productive and
creative on their own. Consequently, employees are able to
professionally and personally develop as a result of corporate social
responsibility.
Role of Board of Directors (BOD) for CSR
activities
• A corporation is a mechanism established to allow different parties to contribute capital,
expertise, and labor for their mutual benefit. The investor/shareholder participates in the profits
of the enterprise without taking responsibility for the operations. Management runs the company
without being responsible for personally providing the funds
• The board of directors therefore, has an obligation to approve all decisions that might affect
the long-run performance of the corporation. This means that the corporation is fundamentally
governed by the board of directors overseeing top management, with the concurrence of the
shareholder.
• The term corporate governance refers to the relationship among these three groups in
determining the direction and performance of the corporation.
Role of the Board in Strategic Management
• How does a board of directors fulfill these many responsibilities? The role of the
board of directors in strategic management is to carry out three basic tasks:
• 1. Monitor: By acting through its committees, a board can keep abreast of
developments in- side and outside the corporation, bringing to management’s
attention developments it might have overlooked. A board should at the
minimum carry out this task.
• 2. Evaluate and influence: A board can examine management’s proposals,
decisions, and actions; agree or disagree with them; give advice and offer
suggestions; and outline alter- natives. More active boards perform this task in
addition to monitoring.
• 3. Initiate and determine: A board can delineate a corporation’s mission and
specify strategic options to its management. Only the most active boards take on
this task in addition to the two previous ones.
Motivation
• उत्प्रेरणा
Motivation
Defining motivation
• According to Stephen P. Robbins, “Motivation is the processes
that account for an individual’s intensity, direction, and persistence of
effort toward attaining a goal. “
• While general motivation is concerned with effort toward any goal,
we’ll narrow the focus to organizational goals in order to reflect our
singular interest in work-related behavior
• The three key elements in our definition are intensity, direction, and
persistence.
 Basic motivation process
• Intensity describes how hard a person tries. This is the element
most of us focus on when we talk about motivation. However,
high intensity is unlikely to lead to favorable job-performance
outcomes unless the effort is channeled in a direction that
benefits the organization. Therefore, we consider the quality of
effort as well as its intensity.
• Effort directed toward, and consistent with, the organization’s
goals is the kind of effort we should be seeking.
• Finally, motivation has a persistence dimension. This measures
how long a person can maintain effort. Motivated individuals
stay with a task long enough to achieve their goal.
Early theories of motivation
1. Hierarchy of Needs Theory
2. Theory X and Theory Y
3. Two-Factor Theory
4. McClelland’s Theory of Needs
Hierarchy of Needs Theory
• The best-known theory of motivation is Abraham Maslow’s hierarchy of
needs. Maslow hypothesized that within every human being, there exists a
hierarchy of five needs:
• 1. Physiological. Includes hunger, thirst, shelter, sex, and other bodily
needs.
• 2. Safety. Security and protection from physical and emotional harm.
• 3. Social. Affection, belongingness, acceptance, and friendship.
• 4. Esteem. Internal factors such as self-respect, autonomy, and
achievement, and external factors such as status, recognition, and
attention.
• 5. Self-actualization. Drive to become what we are capable of becoming;
includes growth, achieving our potential, and self-fulfillment.
Hierarchy of Needs Theory
• So if you want to motivate someone, according to Maslow, you need
to understand what level of the hierarchy that person is currently on
and focus on satisfying needs at or above that level.
• Higher-order needs are satisfied internally (within the person),
whereas lower-order needs are predominantly satisfied externally (by
things such as pay, union contracts, and tenure).
Theory X and Theory Y
• Douglas McGregor proposed two distinct views of human beings: one
basically negative, labeled Theory X, and the other basically positive,
labeled Theory Y. After studying managers’ dealings with employees,
McGregor concluded that their views of the nature of human beings
are based on certain assumptions that mold their behavior.
• Under Theory X , managers believe employees inherently dislike work
and must therefore be directed or even coerced into performing it.
• Under Theory Y , in contrast, managers assume employees can view
work as being as natural as rest or play, and therefore the average
person can learn to accept, and even seek, responsibility.
Theory X and Theory Y
• Theory Y assumes higher-order needs dominate individuals.
• McGregor himself believed Theory Y assumptions were more valid
than Theory X.
• Therefore, he proposed such ideas as participative decision making,
responsible and challenging jobs, and good group relations to
maximize an employee’s job motivation.
Hertzberg Two-Factor Theory
• Believing an individual’s relationship to work is basic, and that
attitude toward work can determine success or failure, psychologist
Frederick Herzberg wondered, “What do people want from their
jobs?” He asked people to describe, in detail, situations in which they
felt exceptionally good or bad about their jobs.
• The responses differed significantly and led Hertzberg to his two-
factor theory —also called motivation-hygiene theory
Two-Factor Theory
• Intrinsic factors such as advancement, recognition, responsibility, and
achievement seem related to job satisfaction. Respondents who felt
good about their work tended to attribute these factors to
themselves
• While dissatisfied respondents tended to cite extrinsic factors, such
as supervision, pay, company policies, and working conditions to job
dissatisfaction.
Two-Factor Theory
• Herzberg characterized conditions such as quality of supervision,
pay, company policies, physical working conditions, relationships
with others, and job security as hygiene factors.
• If we want to motivate people on their jobs, Herzberg suggested
emphasizing factors associated with the work itself or with
outcomes directly derived from it, such as promotional opportunities,
personal growth opportunities, recognition, responsibility, and
achievement.
• These are the characteristics people find intrinsically rewarding.
McClelland’s Theory of Needs
• This theory was developed by David McClelland and his associates. It
looks at three needs:
1. Need for achievement (nAch) is the drive to excel, to achieve in
relationship to a set of standards.
2. Need for power (nPow) is the need to make others behave in a way
they would not have otherwise.
3. Need for affiliation (nAff) is the desire for friendly and close
interpersonal relationships.
Need for Achievement
• McClelland and subsequent researchers focused most of their
attention on nAch.
• High achievers perform best when they perceive their probability of
success as 0.5—that is, a 50–50 chance. They dislike gambling with
high odds because they get no achievement satisfaction from success
that comes by pure chance.
• Similarly, they dislike low odds (high probability of success) because
then there is no challenge to their skills. They like to set goals that
require stretching themselves a little.
Need for Achievement
• Relying on an extensive amount of research, we can predict some
relationships between achievement need and job performance. First,
when jobs have a high degree of personal responsibility and feedback
and an intermediate degree of risk, high achievers are strongly
motivated
• A high need to achieve does not necessarily make someone a good
manager, especially in large organizations. People with a high
achievement need are interested in how well they do personally, and
not in influencing others to do well. High- nAch salespeople do not
necessarily make good sales managers, and the good general
manager in a large organization does not typically have a high need to
achieve.
Needs for affiliation and power
• Needs for affiliation and power tend to be closely related to
managerial success. The best managers are high in their need for
power and low in their need for affiliation.
• In fact, a high power motive may be a requirement for managerial
effectiveness
Contemporary Theory of Motivation
We call them “contemporary theories” because they represent the
current state of thinking in explaining employee motivation.
1. Self-Determination Theory
2.Goal-Setting Theory -Implementing Goal-Setting (MBO)
3. Equity Theory/Organizational Justice
4. Expectancy Theory
Self-Determination Theory
• Self-Determination Theory (SDT) is a psychological framework developed by
Edward L. Deci and Richard M. Ryan that focuses on intrinsic motivation and the
factors that contribute to individuals' sense of autonomy, competence, and
relatedness. It proposes that people are inherently motivated to satisfy three
basic psychological needs:
1.Autonomy: The need to experience freedom, choice, and volition in one's
actions and decisions. Individuals seek to feel in control of their own behaviors
and goals rather than feeling pressured or coerced by external forces.
2.Competence: The need to feel effective, capable, and proficient in one's
interactions and pursuits. This involves seeking opportunities for mastery, growth,
and skill development in activities that are personally meaningful and aligned with
one's interests and values.
3.Relatedness: The need to establish meaningful connections, relationships, and
social bonds with others. This involves experiencing a sense of belonging,
support, and understanding within interpersonal contexts, such as family, friends,
or community.
SDT says that individuals are inherently motivated to pursue activities that satisfy
their innate psychological needs for autonomy, competence, and relatedness.
According to SDT, intrinsic motivation (engaging in activities for inherent enjoyment
or satisfaction) is more sustainable and leads to greater well-being than extrinsic
motivation (engaging in activities for external rewards or pressures).
• According to SDT, satisfying these three basic psychological needs fosters
intrinsic motivation, personal well-being, and optimal functioning.
Conversely, when these needs are thwarted or unmet, individuals may
experience diminished motivation, psychological distress, and maladaptive
behaviors.
• SDT distinguishes between intrinsic motivation, which arises from internal
sources of satisfaction and enjoyment, and extrinsic motivation, which
stems from external rewards, pressures, or obligations. While extrinsic
motivators can influence behavior, they are less likely to sustain long-term
engagement and satisfaction compared to activities that fulfill intrinsic
needs.
• SDT has been applied across various domains, including education, work,
healthcare, sports, and parenting, to understand motivation, engagement,
and well-being. It emphasizes the importance of creating environments
that support autonomy, competence, and relatedness to promote
individuals' intrinsic motivation and flourishing.
• Research within the framework of SDT has identified several factors that facilitate
the satisfaction of basic psychological needs, including:
• Providing meaningful choices and opportunities for self-direction.
• Offering constructive feedback and acknowledging progress and
accomplishments.
• Fostering supportive relationships and social connections.
• Encouraging intrinsic interest, curiosity, and enjoyment in activities.
• Promoting a sense of competence through challenges, learning opportunities,
and skill-building experiences.
• Overall, Self-Determination Theory offers valuable insights into the underlying
motivations that drive human behavior and the conditions that facilitate personal
growth, well-being, and optimal functioning. By understanding and addressing
individuals' basic psychological needs, practitioners and policymakers can design
interventions and environments that nurture intrinsic motivation and enhance
quality of life.
Self-Determination Theory

• When people are paid for work, it feels less like something they want
to do and more like something they have to do. Self-determination
theory also proposes that in addition to being driven by a need for
autonomy, people seek ways to achieve competence and positive
connections to others
Self-Determination Theory
• A recent outgrowth of self-determination theory is self-
concordance , which considers how strongly peoples’
reasons for pursuing goals are consistent with their
interests and core values. If individuals pursue goals
because of an intrinsic interest, they are more likely to
attain their goals and are happy even if they do not. Why?
Because the process of striving toward them is fun.
• In contrast, people who pursue goals for extrinsic reasons
(money, status, or other benefits) are less likely to attain
their goals and less happy even when they do. Why?
Because the goals are less meaningful to them.
• OB research suggests that people who pursue work goals
for intrinsic reasons are more satisfied with their jobs, feel
they fit into their organizations better, and may perform
better.
Goal-Setting Theory
• Proposed by Edwin Locke, goal-setting theory suggests that setting
specific, challenging goals leads to higher levels of performance when
accompanied by appropriate feedback and commitment. Goals serve as a
roadmap for behavior, providing direction, clarity, and motivation for
individuals to strive for achievement.
• A theory that says that specific and difficult/challanging goals, with feedback,
lead to higher performance.
• You’ve heard the sentiment a number of times yourself: “Just do your best. That’s
all anyone can ask.” But what does “do your best” mean?
• In the late 1960s, Edwin Locke proposed that intentions to work toward a goal are
a major source of work motivation. That is, goals tell an employee what needs to
be done and how much effort is needed.
• Evidence strongly suggests that specific goals increase performance; that difficult
goals, when accepted, result in higher performance than do easy goals; and that
feedback leads to higher performance than does non feedback.
Goal-Setting Theory
• But why are people motivated by difficult goals?
• First, challenging goals get our attention and thus tend to help us focus.
• Second, difficult goals energize us because we have to work harder to
attain them. Do you study as hard for an easy exam as you do for a difficult
one? Probably not.
• Third, when goals are difficult, people persist in trying to attain them.
Finally, difficult goals lead us to discover strategies that help us perform the
job or task more effectively.
• People do better when they get feedback on how well they are progressing
toward their goals,
Goal-Setting Theory
• If employees can participate in the setting of their own goals, will
they try harder? The evidence is mixed.
• In some cases, participative set goals yielded superior performance;
in others, individuals performed best when as- signed goals by their
boss. But a major advantage of participation may be that it increases
acceptance of the goal as a desirable one toward which to work.
Goal-Setting Theory
• In addition to feedback, three other factors influence the
goals– performance relationship: goal commitment, task
characteristics, and national culture.
• Goal-setting theory assumes an individual is committed to
the goal and determined not to lower or abandon it. The
individual (1) believes he or she can achieve the goal and
(2) wants to achieve it.
• Goal commitment is most likely to occur when goals are
made public, when the individual has an internal locus of
control and when the goals are self-set rather than
assigned.
• Goals themselves seem to affect performance more
strongly when tasks are simple rather than complex, well
learned rather than novel, and indpendent rather than
interdependent. On interdependent tasks, group goals are
preferable.
Goal-Setting Theory
• Finally, setting specific, difficult, individual goals may have different
effects in different cultures
• To date, research has not shown that group-based goals are more
effective in collectivists than in individualist cultures. In collectivistic
and high-power-distance cultures, achievable moderate goals can be
more highly motivating than difficult ones.
Key assumptions
1. Goal Clarity: The theory assumes that specific and clear goals are more effective in motivating individuals than vague or
general goals. Clear goals provide direction and focus, making it easier for individuals to understand what is expected
of them and how to achieve it.
2. Goal Challenge/ Achievable goal: Another assumption is that challenging goals lead to higher levels of performance
than easy or vague goals. Setting challenging goals encourages individuals to exert greater effort and engage in more
strategic planning and problem-solving to achieve them.
3. Goal Commitment/ Time definition (achieve by when?): The theory posits that individuals are more likely to be
motivated to achieve goals that they are committed to. Commitment to a goal involves a psychological attachment and
dedication to its attainment, increasing persistence and resilience in the face of obstacles.
4. Feedback: Feedback is considered crucial in the goal-setting process. It helps individuals monitor their progress toward
goal achievement, identify areas for improvement, and adjust their efforts accordingly. Timely and specific feedback
enhances motivation by providing individuals with information about their performance and facilitating goal attainment.
5. Task Complexity: The theory acknowledges that the effectiveness of goal setting may vary depending on the complexity
of the task. For simple tasks, goals may directly influence performance, while for complex tasks, goals serve as guides
for action, directing individuals' attention and efforts toward relevant aspects of the task.
• Overall, the Goal Setting Theory assumes that setting specific, challenging, and achievable goals, coupled with
commitment and feedback, can significantly enhance motivation and performance. These assumptions form the
foundation of the theory and provide guidance for its application in various organizational and personal contexts.
Expectancy Theory
Victor Harold Vroom created the Expectancy Theory of Motivation
in 1964.
1. Effort–performance relationship. The probability perceived by the
individual that exerting a given amount of effort will lead to
performance.
2. Performance–reward relationship. The degree to which the
individual believes performing at a particular level will lead to the
attainment of a desired outcome.
3. Rewards–personal goals relationship. The degree to which
organizational rewards satisfy an individual’s personal goals or needs
and the attractiveness of those potential rewards for the individual.
• According to the Expectancy Theory, motivation is highest when
individuals believe that their efforts will result in successful
performance, which in turn will lead to desirable outcomes that
they value. This theory highlights the importance of individuals'
perceptions, beliefs, and expectations in driving their motivation
to engage in specific behaviors.
Equity Theory
Proposed by J. Stacy Adams, equity theory focuses on
individuals' perceptions of fairness in social exchanges. It
suggests that people are motivated when they perceive that their
inputs (such as effort or contribution) and outcomes (such as
rewards or recognition) are equitable compared to those of
others. When perceived inequity occurs, individuals may be
motivated to restore balance through various means.
 How can we motivate employees in
general?
• Motivating employees in general requires a multifaceted approach that takes into account their individual
needs, preferences, and aspirations. Here are some strategies to effectively motivate employees across
various industries and organizational contexts:
1. Recognition and Appreciation:
1. Regularly acknowledge and appreciate employees' contributions and achievements, both publicly and privately.
2. Implement an employee recognition program that rewards outstanding performance, innovative ideas, and exemplary
behavior.
3. Provide specific and sincere feedback to employees, highlighting their strengths and areas for improvement.
2. Opportunities for Growth and Development:
1. Offer training programs, workshops, and seminars to enhance employees' skills and knowledge.
2. Provide opportunities for career advancement, such as promotions, lateral moves, or cross-training.
3. Encourage employees to set personal and professional development goals, and support them in achieving these
objectives.
3. Meaningful Work:
1. Align employees' tasks and responsibilities with their interests, strengths, and values.
2. Clearly communicate how employees' work contributes to the organization's mission, goals, and overall success.
3. Empower employees to make decisions and take ownership of their work, fostering a sense of autonomy and purpose.
4. Work-Life Balance:
1. Offer flexible work arrangements, such as remote work options, flexible hours, or compressed workweeks.
2. Promote a culture of work-life balance by encouraging employees to take breaks, use their vacation days, and prioritize
self-care.
3. Provide support resources, such as employee assistance programs or wellness initiatives, to help employees manage
5. Positive Work Environment:
5. Foster a supportive and inclusive workplace culture where employees feel valued, respected, and heard.
6. Promote open communication and collaboration among team members, encouraging the sharing of ideas and
feedback.
7. Create opportunities for social interaction and team bonding, such as team-building activities, outings, or
events.
6. Financial and Non-Financial Incentives:
5. Offer competitive salaries, benefits, and performance-based bonuses to recognize and reward employees'
contributions.
6. Provide non-financial incentives, such as extra time off, flexible schedules, or recognition ceremonies, to
motivate and engage employees.
7. Tailor incentives to individual preferences and motivations, taking into account factors like career aspirations,
personal interests, and lifestyle choices.
7. Leadership and Management Support:
5. Lead by example and demonstrate authentic leadership behaviors, such as integrity, empathy, and
accountability.
6. Provide coaching, mentorship, and guidance to help employees navigate challenges and achieve their goals.
7. Foster a culture of trust and transparency, where employees feel comfortable expressing their ideas, concerns,
and feedback.
By implementing these strategies, organizations can create a motivating work environment that
fosters employee engagement, satisfaction, and productivity. It's essential to continually assess and
adapt these approaches to meet the evolving needs and expectations of employees.
How can we motivate in general?
A. Jobs Redesigned
1. Job Rotation If employees suffer from over
routinization of their work, one alternative is job
rotation , or the periodic shifting of an employee
from one task to another with similar skill
requirements at the same organizational level (also
called cross-training ).
• At Singapore Airlines, a ticket agent may take on
the duties of a baggage handler. Extensive job
rotation is among the reasons Singa- pore Airlines is
rated one of the best airlines in the world and a
highly desirable place to work.
How Can Jobs Be Redesigned?
• The strengths of job rotation are that it reduces boredom,
increases motiva- tion, and helps employees better understand
how their work contributes to the organization. An indirect
benefit is that employees with a wider range of skills give
management more flexibility in scheduling work, adapting to
changes, and fill- ing vacancies. International evidence from
Italy, Britain, and Turkey does show that job rotation is
associated with higher levels of organizational performance in
manufacturing settings.
• However, job rotation has drawbacks. Training costs increase,
and moving a worker into a new position reduces productivity
just when efficiency at the prior job is creating organizational
economies. Job rotation also creates disruptions when
members of the work group have to adjust to the new
employee.
How Can Jobs Be Redesigned?
2. Job Enrichment Job enrichment expands jobs by increasing the
degree to which the worker controls the planning, execution, and
evaluation of the work.
• An enriched job organizes tasks to allow the worker to do a complete
activity, in- creases the employee’s freedom and independence,
increases responsibility, and provides feedback so individuals can
assess and correct their own performance.
B. Alternative Work Arrangements
• Another approach to motivation is to alter work
arrangements with flextime, job sharing, or
telecommuting.
• These are likely to be especially important for a diverse
workforce of dual-earner couples, single parents, and
employees caring for a sick or aging relative.
1. Flextime Employees must work a specific number of
hours per week but are free to vary their hours of work
within certain limits.
• Flextime has become extremely popular; according to the
Bureau of Labor Statistics, nearly 26 percent of working
women with children have flex- ible work schedules,
compared to just 14 percent in 1991.
Alternative Work Arrangements
• Claimed benefits include reduced absenteeism, increased
productivity, reduced overtime expenses, reduced hostility toward
management, reduced traffic congestion around work sites,
elimination of tardiness, and increased au- tonomy and responsibility
for employees—any of which may increase employee job satisfaction.
• Flextime’s major drawback is that it’s not applicable to every job or
every worker. It works well with clerical tasks for which an employee’s
interaction with people outside his or her department is limited.
• It is not a viable option for receptionists, sales personnel in retail
stores, or people whose service jobs require them to be at their
workstations at predetermined times.
Alternative Work Arrangements
• Job Sharing Job sharing allows two or more
individuals to split a traditional 40-hour-a-week job. One
might perform the job from 8:00 a.m. to noon and the
other from 1:00 p.m. to 5:00 p.m., or the two could work
full but alternate days.
• For example, top Ford engineers Julie Levine and Julie
Rocco engage in a job-sharing program that allows both of
them to spend time with their families while working on
the time-intensive job of redesigning the Explorer
crossover.
• Typically, one of the pair will work late afternoons and
evenings while the other works mornings. They both
agree that the program has worked well, although making
such a relationship work requires a great deal of time and
preparation
Alternative Work Arrangements
• Approximately 19 percent of large organizations now offer job
sharing.
• Reasons it is not more widely adopted are likely the difficulty of
finding compatible partners to share a job and the historically
negative perceptions of individu- als not completely committed to
their job and employer.
• Job sharing allows an organization to draw on the talents of more
than one individual in a given job. A bank manager who oversees two
job sharers describes it as an opportunity to get two heads but “pay
for one.
Alternative Work Arrangements
• Telecommuting Working from home at least two
days a week on a computer that is linked to the
employer’s office. A closely related term—the virtual
office —describes working from home on a relatively
permanent basis.
• The U.S. Department of the Census estimated there
had been a 25 per- cent increase in self-employed
home-based workers from 1999 to 2005, and a 20
percent increase in employed workers who work
exclusively from home.
• Well-known organizations that actively encourage
telecommuting include IBM, American Express, Sun
Microsystems, and a number of U.S. government
agencies.
Alternative Work Arrangements
• What kinds of jobs lend themselves to telecommuting?
• There are three categories:
• routine information-handling tasks,
• mobile activities, and
• professional and other knowledge-related tasks
• Writers, attorneys, analysts, and employ- ees who spend the majority of
their time on computers or the telephone— such as telemarketers,
customer-service representatives, reservation agents, and product-
support specialists—are natural candidates. As telecommuters, they can
access information on their computers at home as easily as in the
company’s office.
C. Employee Involvement/Management by
Objective (MBO)/ Participative management
• Employee involvement is a participative process that uses
employees’ input to increase their commitment to the organization’s
success. The logic is that if we engage workers in decisions that affect
them and increase their autonomy and control over their work lives,
they will become more motivated, more committed to the
organization, more productive, and more satisfied with their jobs.
• Employee involvement programs differ among countries. While U.S.
employees readily accepted employee involvement programs,
managers in India who tried to em- power their employees were
rated low by those employees.
• MBO-goal, time specified, feedback, …
Forms of Employee Involvement Programs
1. Participative Management Common to all participative
management programs is joint decision making, in which
subordinates share a significant degree of decision-making power
with their immediate superiors.
• Participative management has, at times, been promoted as a panacea
for poor morale and low productivity. But for it to work, employees
must be engaged in issues relevant to their interests so they’ll be
motivated, they must have the competence and knowledge to make a
useful contribution, and trust and confidence must exist among all
parties.
Forms of Employee Involvement Programs
• Studies of the participation–performance relationship have yielded
mixed findings. Organizations that institute participative
management do have higher stock returns, lower turnover rates, and
higher estimated labor pro- ductivity, although these effects are
typically not large.
D. Using Rewards to Motivate Employees
• Pay is not a primary factor driving job satisfaction.
However, it does motivate people, and companies often
underestimate its importance in keeping top talent. A
2006 study found that while 45 percent of employers
thought pay was a key factor in losing top talent, 71
percent of top performers called it a top reason
• Regarding pay, we will consider,
(1) what to pay employees (decided by establishing a pay
struc- ture),
(2) how to pay individual employees (decided through
variable pay plans and skill-based pay plans),
(3) what benefits and choices to offer (such as flex- ible
benefits), and
(4) how to construct employee recognition programs.
 How to Pay: Rewarding Individual Employees
Through Variable-Pay Programs
• “Why should I put any extra effort into this job?” asked Anne Garcia, a fourth-
grade elementary schoolteacher in Denver, Colorado. “I can excel or I can do
the bare minimum. It makes no difference. I get paid the same.
• A number of organizations are moving away from paying solely on credentials
or length of service. Piece-rate plans, merit-based pay, bonuses, profit
sharing, gainsharing, and employee stock ownership plans are all forms of a
variable-pay program, which bases a portion of an employee’s pay on some
individual and/or organiza- tional measure of performance.
• Variable-pay plans have long been used to compensate salespeople and
executives. Some estimates suggest more than 70 percent of U.S. companies
have some form of variable-pay plan,
Types of variable-pay programs
• Piece-Rate Pay The piece-rate pay plan has long been popular as
a means of compensating production workers with a fixed sum for
each unit of production completed.
• A pure piece-rate plan provides no base salary and pays the em-
ployee only for what he or she produces. Ballpark workers selling
peanuts and soda are frequently paid this way. If they sell 40 bags of
peanuts at $1 each, their take is $40. The harder they work and the
more peanuts they sell, the more they earn.
Types of variable-pay programs
• Merit-Based Pay A merit-based pay plan pays for individual
performance based on performance appraisal ratings. A main
advantage is that people thought to be high performers can get
bigger raises. If designed correctly, merit-based plans let individuals
perceive a strong relationship between their performance and their
rewards.
• Most large organizations have merit pay plans, especially for salaried
em- ployees. IBM increases employees’ base salary based on annual
performance evaluations. Since the 1990s, when the economy
stumbled badly, an increasing number of Japanese companies have
abandoned seniority-based pay in favor of merit-based pay.
Types of variable-pay programs
• Bonuses An annual bonus is a significant component of total
compensation for many jobs. Among Fortune 100 CEOs, the bonus
(mean of $1.01 million) generally exceeds the base salary (mean of
$863,000).
• But bonus plans increasingly include lower-ranking employees; many
companies now routinely reward production employees with bonuses
in the thousands of dollars when profits improve. The incentive
effects of performance bonuses should be higher than those of merit
pay because, rather than paying for performance years ago (that
was rolled into base pay), bonuses reward recent performance.
When times are bad, firms can cut bonuses to reduce compensation
costs.
Types of variable-pay programs
• Skill-Based Pay Skill-based pay (also called competency-based or
knowledge-based pay ) is an alternative to job-based pay that bases pay
levels on how many skills employees have or how many jobs they can do.
• For employers, the lure of skill-based pay plans is increased flexibility of
the workforce: staffing is easier when employee skills are interchangeable.
• Skill-based pay also facilitates communication across the organization
because people gain a better under- standing of each other’s jobs. One
study found that across 214 different orga- nizations, skill-based pay was
related to higher levels of workforce flexibility, positive attitudes,
membership behaviors, and productivity
Types of variable-pay programs
• Profit-Sharing Plans A profit-sharing plan distributes
compensation based on some established formula designed around a
company’s profitability. Compensation can be direct cash outlays or,
particularly for top managers, allocations of stock options. (25% of
profit)
• Profit-sharing plans at the organizational level appear to have positive
impacts on employee atti- tudes; employees report a greater feeling
of psychological ownership.
Types of variable-pay programs
• Employee Stock Ownership Plans An employee stock ownership
plan (ESOP) is a company-established benefit plan in which
employees acquire stock, often at below-market prices, as part of
their benefits. Companies as varied as Pub- lix Supermarkets and W. L.
Gore & Associates are now more than 50 percent employee-owned.
72 But most of the 10,000 or so ESOPs in the United States are in
small, privately held companies.
• Research on ESOPs indicates they increase employee satisfaction and
inno- vation. But their impact on performance is less clear. ESOPs
have the poten- tial to increase employee job satisfaction and work
motivation, but employees need to psychologically experience
ownership
 Flexible Benefits: Developing a Benefits
Package
• Consistent with expectancy theory’s thesis that organizational
rewards should be linked to each individual employee’s goals,
flexible benefits individualize rewards by allowing each
employee to choose the compensation package that best satisfies
his or her current needs and situation. These plans replace the
“one-benefit-plan-fits-all” programs designed for a male with a
wife and two children at home that dominated organizations for
more than 50 years. 83 Fewer than 10 percent of employees
now fit this image: about 25 percent are single, and one-third are
part of two-income families with no children.
• Flexible ben- efits can accommodate differences in employee
needs based on age, marital status, spouses’ benefit status, and
number and age of dependents.
Principals of motivation
Leadership and Its importance in
Management
• नेतृत्व
Concept of leadership
• Robbins, Leadership is the ability to influence a group toward the
achievement of a vision or set of goals. The source of this influence
may be formal, such as that provided by managerial rank in an
organization. But not all leaders are managers, nor, for that matter,
are all managers leaders. Just because an organization provides its
managers with certain formal rights is no assurance they will lead
effectively.
• Non sanctioned leadership— the ability to influence that arises
outside the formal structure of the organization—is often as
important or more important than formal influence. In other words,
leaders can emerge from within a group as well as by formal
appointment.
Who are Leaders and What is Leadership?
• Our definition of a leader is someone who can influence others and who has
managerial authority. Leadership is what leaders do. It’s a process of leading a
group and influencing that group to achieve its goals.
• Are all managers leaders? Because leading is one of the four management
functions, yes, ideally, all managers should be leaders.
• Leadership as a general term is not related to managership. A person can be a leader by virtue
of qualities in him. For example: leader of a club, class, welfare association, social
organization, etc. Therefore, it is true to say that, “All managers are leaders, but all leaders are
not managers.”
• A leader is one who influences the behavior and work of others in group efforts towards
achievement of specified goals in a given situation. On the other hand, manager can be a true
manager only if he has got traits of leader in him. Manager at all levels are expected to be the
leaders of work groups so that subordinates willingly carry instructions and accept their
guidance. A person can be a leader by virtue of all qualities in him
Leadership
• "Leadership is influence, nothing more, nothing less." - John C.
Maxwell. Maxwell's definition succinctly captures the essence of
leadership as the ability to influence others, emphasizing that
leadership is not defined by titles or positions but by the impact
one has on others.
• "Leadership is the capacity to translate vision into reality." -
Warren Bennis
• Bennis highlights the role of leaders in bringing forth a vision
and making it a tangible reality. This definition emphasizes the
importance of vision, strategy, and execution in effective
leadership.
Features
1.Vision: Leaders have a clear and compelling vision of the future.
They articulate a sense of purpose and direction that inspires others
to follow.
2.Integrity: Integrity is foundational to effective leadership. Leaders
demonstrate honesty, transparency, and ethical behavior in all their
actions.
3.Empathy: Effective leaders understand and empathize with the
needs, feelings, and perspectives of others. They build strong
relationships based on trust, respect, and compassion.
4.Influence: Leadership is fundamentally about influence. Leaders
have the ability to motivate, persuade, and inspire others to take
action and achieve shared goals.
5. Communication: Effective communication is essential for leadership. Leaders
articulate their vision, goals, and expectations clearly and listen actively to the input
and feedback of others.
6. Decisiveness: Leaders are able to make tough decisions, even in the face of
uncertainty or adversity. They weigh options carefully and take decisive action
when necessary.
7. Adaptability: Leadership requires the ability to adapt to changing circumstances
and environments. Leaders remain flexible and open-minded, embracing
innovation and learning from failure.
8. Resilience: Leaders demonstrate resilience in the face of challenges and
setbacks. They maintain a positive attitude, persevere through adversity, and
inspire others to do the same.
9. Accountability: Leaders hold themselves and others accountable for their actions
and decisions. They take responsibility for outcomes and ensure that commitments
are honored.
Early Leadership Theories
1. Trait theory of Leadership
• Leadership research in the 1920s and 1930s focused on isolating leader
traits—that is, characteristics—that would differentiate leaders from
nonleaders. Some of the traits studied included physical stature,
appearance, social class, emotional stability, fluency of speech, and
sociability. Despite the best efforts of researchers, it proved impossible to
identify a set of traits that would always differentiate a leader (the person)
from a non- leader.
• Researchers eventually recognized that traits alone were not sufficient for
identify ing effective leaders since explanations based solely on traits
ignored the interactions of leaders and their group members as well as
situational factors. Possessing the appropriate traits only made it more
likely that an individual would be an effective leader.
Behavioural Theories
• Behavioral theories approach would provide more definitive answers
about the nature of leadership than did the trait theories.
• Leadership theories that identify behaviors that differentiated
effective leaders from ineffective leaders
• Trait research provides a basis for selecting the right people for
leadership. In contrast, behavioral theories of leadership implied we
could train people to be leaders.
Contingency Theories of Leadership
• “The corporate world is filled with stories of leaders who failed to
achieve greatness because they failed to understand the context they
were working in.” In this section we examine three contingency
theories—Fiedler, Hersey-Blanchard, and path-goal. Each looks at
defin- ing leadership style and the situation, and attempts to answer
the if-then contingencies (that is, if this is the context or situation,
then this is the best leadership style to use).
Contingency Theories (Modern theories)
Situational Leadership Theory
• The situational leadership style refers to a leadership approach
that emphasizes flexibility and adaptability in response to the
specific needs and readiness levels of followers. Instead of
adhering to a single leadership style, situational leaders assess
the situation at hand and adjust their approach accordingly to
effectively guide and support their team members.
1. Adaptability: Situational leaders are highly adaptable and flexible in their approach to leadership.
They recognize that different situations and individuals require different leadership styles, and they
are willing to adjust their behavior accordingly.
2. Assessment of Follower Readiness: Situational leaders assess the readiness levels of their
followers in terms of their competence and commitment to perform a specific task or goal. This
assessment helps them determine the appropriate leadership style to use for each follower or
situation.
3. Leadership Styles: Situational leadership theory identifies four primary leadership styles: directing,
coaching, supporting, and delegating. Situational leaders match their leadership style to the
readiness level of their followers, providing the appropriate level of direction, guidance, support, or
autonomy as needed.
4. Individualized Approach: Situational leaders take an individualized approach to leadership,
recognizing that each follower may have different levels of readiness for a given task or goal. They
tailor their leadership style to the specific needs and capabilities of each follower, rather than
applying a one-size-fits-all approach.
5. Dynamic Leadership: Situational leadership is dynamic and responsive to change. Situational
leaders continuously monitor the situation and adjust their leadership style as needed based on
changes in the environment, task requirements, or follower readiness.
6. Effective Communication: Situational leaders are effective communicators who provide clear
direction, feedback, and support to their followers. They establish open lines of communication,
encourage dialogue, and actively listen to the concerns and ideas of their team members.
7. Results-Oriented: While situational leaders prioritize the development of their followers, they are
also results-oriented and focused on achieving organizational goals. They balance the need for
individual development with the need to deliver results and meet performance targets.
 Dynamic/contingent/Situational
•
Leadership Theory
Situational leadership theory (SLT) focuses on the followers. It says
successful leadership depends on selecting the right leader- ship style
contingent on the followers’ readiness, or the extent to which they are
willing and able to accomplish a specific task. A leader should choose one of
four behaviors depending on follower readiness.
• If followers are unable and unwilling to do a task, the leader needs to give
clear and specific directions;
• if they are unable and willing, the leader needs to display high task
orientation to compensate for followers’ lack of ability and high relationship
orientation to get them to “buy into” the leader’s desires
• If followers are able and unwilling, the leader needs to use a supportive
and participative style;
• if they are both able and willing, the leader doesn’t need to do much.
Modern Styles of Leadership

• Contemporary leadership theories—

• charismatic leadership and transformational leadership, transactional
leadership, situational leadership, servant leadership, ethical
leadership

• with a common theme: they view leaders as individuals who inspire

followers through their words, ideas, and behaviors.
Charismatic Leadership
• John F. Kennedy, Martin Luther King Jr., Ronald Reagan, Mary Kay Ash
(founder of Mary Kay Cosmetics), and Steve Jobs (co-founder of Apple
Computer) are frequently cited as charismatic leaders. What do they
have in common?
• Charismatic leadership is a leadership style characterized by
the leader's ability to inspire and influence others through their
personal charm, charisma, and vision. Charismatic leaders
possess a magnetic personality and exude confidence,
enthusiasm, and conviction, which captivates and motivates
their followers. They often possess exceptional communication
skills and are adept at articulating a compelling vision or
mission that resonates with others.
• What Is Charismatic Leadership? Max Weber, a sociologist, defined
charisma (from the Greek for “gift”) more than a century ago as “a
certain quality of an individual personality, by virtue of which he or
she is set apart from ordinary people and treated as endowed with
supernatural, superhuman, or at least specifically exceptional powers
or qualities. These are not accessible to the ordinary person and are
regarded as of divine origin or as exemplary, and on the basis of them
the individual concerned is treated as a leader
Key Characteristics of a Charismatic Leader
• 1. Vision and articulation. Has a vision—expressed as an idealized
goal—that proposes a future better than the status quo; and is able
to clarify the importance of the vision in terms that are
understandable to others.
• 2. Personal risk. Willing to take on high personal risk, incur high costs,
and engage in self- sacrifice to achieve the vision.
• 3. Sensitivity to follower needs. Perceptive of others’ abilities and
responsive to their needs and feelings.
• 4. Unconventional behavior. Engages in behaviors that are perceived
as novel and counter to norms.
Charismatic Leaders
• Does Effective Charismatic Leadership Depend on the Situation?
• Research shows impressive correlations between charismatic
leadership and high performance and satisfaction among followers.
• People working for charismatic leaders are motivated to exert extra
effort and, because they like and respect their leader, express greater
satisfaction. Organizations with charismatic CEOs are also more
profitable, and charismatic college professors enjoy higher course
evalua-tions.
Transactional Leadership
• Transactional leadership is a style of leadership that focuses on
exchanges (output) between leaders and followers, typically
based on rewards, punishments, or other forms of transactional
incentives.
• In contrast to transformational leadership, which emphasizes
inspiring and empowering followers to achieve higher levels of
performance.
Characterstics of Transactional leadership
1.Contingent Rewards: Transactional leaders use contingent rewards, such as
bonuses, promotions, or other incentives, to motivate and reinforce desired
behaviors or performance outcomes. Followers receive rewards for meeting
established goals or fulfilling their responsibilities.
2.Management by Exception: Transactional leaders typically engage in
management by exception, where they intervene only when problems arise or
when performance falls below acceptable standards. They set clear expectations
and standards for performance and take corrective action when necessary.
3.Directive Communication: Transactional leaders tend to use a directive
communication style, providing specific instructions and guidance to their
followers. They focus on clarifying expectations, assigning tasks, and ensuring
that goals are met according to predetermined standards.
4.Transactional Exchanges: The relationship between transactional leaders and
followers is based on exchanges of resources, where followers receive rewards
or reinforcement in exchange for their compliance, effort, or performance. This
transactional approach to leadership is characterized by a quid-pro-quo mentality.
Transformational Leadership
• Transformational leadership is a leadership style that focuses
on inspiring and motivating followers to achieve high levels of
performance and personal growth. This leadership approach
goes beyond transactional exchanges (such as rewards or
punishments) and seeks to transform individuals and
organizations by creating a shared vision, fostering innovation,
and empowering followers to reach their full potential.
Key characteristics of transformational
leadership include:
1. Visionary Leadership: Transformational leaders articulate a compelling vision of the future that
inspires and motivates followers. They communicate a clear and inspiring picture of what can be
achieved and rally others around a shared purpose and mission.
2. Inspirational Motivation: Transformational leaders inspire and energize their followers through their
passion, enthusiasm, and optimism. They use powerful communication techniques, such as
storytelling and emotional appeals, to create a sense of excitement and commitment to the vision.
3. Intellectual Stimulation: Transformational leaders encourage creativity, innovation, and critical
thinking among their followers. They challenge assumptions, encourage new ideas, and foster a
culture of learning and experimentation that empowers individuals to think outside the box.
4. Individualized Consideration: Transformational leaders demonstrate genuine concern for the needs,
aspirations, and development of their followers. They provide personalized support, mentorship,
and coaching to help individuals grow and achieve their goals.
5. Charisma and Influence: Transformational leaders possess a charismatic personality and have a
powerful influence over their followers. Their strong presence, confidence, and authenticity inspire
trust and confidence, leading to increased engagement and commitment.
6. Empowerment and Delegation: Transformational leaders empower their followers by delegating
authority and decision-making responsibilities. They trust their team members to take ownership of
their work and provide them with the autonomy and resources needed to succeed.
 Transformational and Transactional
Leadership
• The Ohio State studies, Fiedler’s model, and path–goal theory describe
transactional leaders , who guide their followers toward established goals by
clarifying role and task requirements and focuses on only output.
• Transformational leaders inspire followers to transcend their self-interests for
the good of the organization and can have an extraordinary effect on their
followers.
• Richard Branson of the Virgin Group, and Jim McNerney of Boeing are all
transformational leaders. They pay attention to the concerns and needs of
individual followers; they change followers’ awareness of issues by helping
them look at old problems in new ways; and they excite and inspire followers
to put out extra effort to achieve group goals.
Servant Leadership
• Servant Leadership: Servant leadership emphasizes the
leader's role as a servant to their followers. Leaders prioritize
the needs of others, empathize with their concerns, and support
their growth and development. By serving others, leaders foster
trust, collaboration, and a sense of community within the
organization.
1. Service Orientation: Servant leaders prioritize serving the needs of others before their own. They are genuinely
concerned about the growth and development of their team members.
2. Empathy: A servant leader shows empathy towards others, understanding their perspectives, feelings, and
challenges. This empathy helps them connect with their team members on a deeper level.
3. Listening: Servant leaders are excellent listeners. They actively seek to understand the concerns, ideas, and
feedback of their team members without judgment.
4. Healing: This involves fostering a supportive environment where conflicts can be resolved, wounds can be
healed, and personal growth can occur. Servant leaders promote harmony and emotional well-being within the
team.
5. Awareness: Servant leaders possess a high level of self-awareness and social awareness. They understand their
own strengths, weaknesses, values, and biases, as well as the dynamics within their team and organization.
6. Persuasion, not Coercion: Rather than relying on authority or coercion, servant leaders persuade others through
persuasion, influence, and inspiration. They strive to gain buy-in and commitment from their team members rather
than simply giving orders.
7. Conceptualization: Servant leaders have a long-term perspective and the ability to envision the future. They are
adept at conceptual thinking and can see the bigger picture, guiding their decisions and actions accordingly.
8. Foresight: Servant leaders possess the ability to anticipate future trends, opportunities, and challenges. They use
this foresight to make informed decisions and steer their team towards success.
9. Stewardship: Servant leaders view themselves as stewards of their organization's resources, including its human
capital. They take responsibility for nurturing and developing their team members, as well as ensuring the
organization's mission and values are upheld.
10.Commitment to the Growth of Others: Servant leaders are committed to the personal and professional growth
of their team members. They provide mentorship, coaching, and support to help individuals reach their full
potential.
11.Building Community: Servant leaders foster a sense of community and collaboration within their team. They
promote teamwork, trust, and camaraderie, creating an environment where everyone feels valued and respected.
Ethical Leadership
• Ethical Leadership: Ethical leadership emphasizes the
importance of ethical behavior, integrity, and social
responsibility in leadership. Ethical leaders demonstrate
fairness, honesty, and a commitment to ethical principles,
setting a positive example for followers and promoting ethical
conduct throughout the organization.
Importance of Leadership:

• Initiating Action: Leadership starts from the very beginning, even before
the work actually starts. A leader is a person who communicates the
policies and plans to the subordinates to start the work.
• Providing Motivation: A leader motivates the employees by giving
them financial and non-financial incentives and gets the work done
efficiently. Motivation is the driving force in an individual’s life.
• Providing guidance: A leader not only supervises the employees but also
guides them in their work. He instructs the subordinates on how to
perform their work effectively so that their efforts don’t get wasted.
• Creating confidence: A leader acknowledges the efforts of the employees,
explains to them their role clearly and guides them to achieve their goals.
He also resolves the complaints and problems of the employees, thereby
building confidence in them regarding the organization.
• Building work environment: A good leader should maintain personal contacts
with the employees and should hear their problems and solve them. He always
listens to the point of view of the employees and in case of disagreement
persuades them to agree with him by giving suitable clarifications. In case of
conflicts, he handles them carefully and does not allow it to adversely affect the
entity. A positive and efficient work environment helps in stable growth of the
organization.
• Co-ordination: A leader reconciles the personal interests of the employees with
the organizational goals and achieves co-ordination in the entity.
• Creating Successors: A leader trains his subordinates in such a manner that they
can succeed him in future easily in his absence. He creates more leaders.
• Induces change: A leader persuades, clarifies and inspires employees to accept
any change in the organization without much resistance and discontentment. He
makes sure that employees don’t feel insecure about the changes.
• Often, the success of an organization is attributed to its leaders. But,
one must not forget that it’s the followers who make a leader
successful by accepting his leadership. Thus, leaders and followers
collectively play a key role to make leadership successful.
• 4.4 Quality management & TQM techniques
What is quality management?
• Quality management is the act of overseeing all activities and tasks which
are necessary to maintain or achieve a certain level of excellence in your
organization. It consists of four key processes: quality planning, quality
assurance, quality control and continual improvement.
1. Quality planning – devising a quality management plan that describes the
processes and metrics that are to be used.
2. Quality assurance - assuring, validating and exhibiting to the organization
that you have the abilities, skills, knowledge and attitude to achieve the
desired outcome.
3. Quality control – inspection, testing and measurement of project
deliverables.
4. Continual improvement – examining how the three elements above will
drive further improvements in efficiency and effectiveness.
• These processes are defined by their relationship with three principles:
focus on the customer, understand the process and consider employees’
commitment.
• Focus on the customer
• Quality management techniques are also designed to measure customers’
satisfaction. They aim to try and answer these questions:
• Are customers satisfied?
• Are customers happy?
• Is the customer base increasing in number?
• Do we meet or exceed customers’ expectation?
• Is there anything that could be done, or could be done better, to serve
customers better?
TQM
• Total quality management (TQM) is a management philosophy of
continuously improving product/service quality through everyone's
commitment and involvement to satisfy customer needs. It is a
comprehensive approach for improving product quality and customer
satisfaction and becomes possible when an entire organizational
structure focuses on quality and customer satisfaction through an
integrated system of management.
Total Quality Management (TQM)
Tools and Techniques of TQM
• Value-Added Analysis: Value-added analysis is the comprehensive evaluation of
all work activities, materials flows, and paperwork to determine the value that
they add for customers. Such an analysis often reveals wasteful or unnecessary
activities that can be eliminated without jeopardizing customer service.
• Benchmarking: It is the process of learning from best practices of other
organizations that produce superior performance. It is a systematic and
continuous process of measuring and comparing organization's business
processes and practices against those of the best organization. This enables the
firm to stay abreast of improvements and changes its competitors are using. Such
comparison provides information to the organization to improve its performance
and quality. Benchmarking is of two types: internal and external. The former
compares the processes of one unit with the other unit within the same
organization. It encourages learning from the best practices existing within the
organization and help in upgrading the quality standards and efficiency. External
benchmarking, also known as the competitor benchmarking, compares with the
best organization.
• Responsiveness: It is one another technique of TQM. The
organizations can gain competitive advantage by being better, smarter
and faster than their competitors at doing valuable things for their
customers. Responsiveness often separates the winner from the
losers in the world of competition. If the organization can respond
faster to the customer requests, it is likely to get advantage over
others.
• Reducing Cycle Time: Cycle time is the time needed by the
organization to develop, make, and distribute products or services. If
a business can reduce its cycle time, quality will often improve.
• Outsourcing: Outsourcing is the process of subcontracting services and operations to
other firms that can perform them cheaper or better. If a business performs each and
every one of its own administrative and business services and operations, it is almost
certain to be doing at least some of them in an inefficient or low-quality manner. If those
areas can be identified and outsourced, the firm will save money and realize· a higher-
quality service or operation. It increases efficiency, reduces cost, enhances productivity
of resources and improves quality. Above all, it helps focus the energy of the employees
to the core functions of the organization in which they have core competencies. The
functions that can be outsourced include security, transportation, house-keeping, legal
services, canteen services, postal services, postal services, training, data processing and
so on.Outsourcing helps in restructuring and downsizing the organizations. Routine tasks
in which the organization can get all the benefits of outsourcing without any risk and for
which external agencies are easily available are outsourced. Once framed out, they
require minimum supervision from the managers of the organization. The organization
gets quality services from the specialized outside agencies at cheaper cost.
• Quality Circles: The purpose of quality circle is to ensure the best
cross section of individuals who work within a given process.
Members are brought together to change and improve that process.
TQM has become a part of a trend towards increased employee
involvement in a variety of work decisions and
empowerment. Quality circles have the potential to do anything that
they give employees opportunity to identify and solve real problems
of any type. Circle solutions ate superior to the solutions reached by
other means. They have good access to useful information, strong
commitment to establish and attain their goals. The self-managing
work team empowers employees and improves productivity.
• Six Sigma: six sigma is a fact based data-driven philosophy of quality
improvement that values defect prevention over defect detection. It is to
design, measure, analyze and control the input side of a production
process to achieve the goal of minimum defects rather than measuring the
quality of a product after it is produced. It is a process that uses statistical
models coupled with specific quality tools.
• Kaizen: Kaizen refers to the elimination of waste. This technique
emphasizes that managers and other employers should be taught to
critically analyze all aspects of their organization's production system to
identify any sources of waste and suggest ways to eliminate them. Often
self managed teams take out time once a week or once a month to analyze
the design of their jobs and to suggest potential improvements to
functional managers.
• Pareto Analysis: Pareto Analysis consists of constructing a bar chart by counting the number of
times significant quality problems occur. The tallest bar on the chart represents the most
common problem and demand prompt attention.
• Fish-bone Diagrams: It is also called cause and effect diagram. It is used extensively by
organizations for the identification of various causes and sub-causes responsible for a problem.
Such causes are ranked in order of importance and necessary actions are taken to eliminate them.
Thus, the manager can systematically identify a likely cause of the problem by constructing a fish-
bone diagram.
• Control Chart : A control chart is used to monitor variations from the standard. It has three lines:
the upper control limit, the lower control limit and the average line. The product, which is
outside the acceptable limits is defective and hence is rejected.
• Flow Chart : A flow chart is a pictorial representation that shows all the steps in a process. It can
be used to scientifically identify the ideal path of a work process. The flow of work activities
should follow this path. Any deviation from this ideal path is detected.
• ISO 9000: They are set of quality standards created by International Organization for
Standardization (ISO). Organizations obtain certification form ISO. ISO standards cover product
testing, employee training, record keeping, supplier relations and repair policies and procedures.
Originally, these were introduced for manufacturing sector only. However, these days, they are
used in the service sector as well.
Authority and power delegation
• अधिकार
• शक्ति
Authority
• Authority is the power to make decisions which guide the action of others.
Delegation of authority contributes to the creation of an organisation. No
single person is in a position to discharge all the duties in an organisation.
In order to finish the work in time, there is a need to delegate authority
and follow the principles of division of labour. Delegation permits a person
to extend his influence beyond the limits of his own personal time, energy
and knowledge.
• Authority is defined as institutionalised and legal power inherent in a job,
function, or position that enables the job holder to successfully carry out
his/her responsibilities. It refers to power that is delegated formally and
legally. It includes right to command a situation, commit resources, give
orders, and expect them to be obeyed. It is accompanied by responsibility
for one’s action and failures to act. Additionally, true authority also means
that the target accepts the authority.
• “Authority is the power to command, to act or not to act in a manner
deemed by the possessor of the authority to further enterprise or
departmental performance”. -Koontz and O’Donnell
Concepts of Power and Influence
• Power refers to a capacity that A has to influence the behavior of B
so B acts in accordance with A ’s wishes. Someone can thus have
power but not use it; it is a capacity or potential. Probably the most
important aspect of power is that it is a function of dependence.
• The greater B ’s dependence on A, the greater A ’s power in the
relationship.
 Concepts of Power and Influence
• A person can have power over you only if he or she controls
something you desire.
• If you want a college degree and have to pass a certain course to
get it, and your current instructor is the only faculty member in
the college who teaches that course, he or she has power over
you. Your alternatives are highly limited, and you place a high
degree of importance on obtaining a passing grade
• Similarly, if you’re attending college on funds totally provided by
your parents, you prob- ably recognize the power they hold over
you. You’re dependent on them for financial support. But once
you’re out of school, have a job, and are making a good income,
your parents’ power is reduced significantly.
Bases of Power/ How do people get power?
How is power delegated?
• Where does power come from? What gives an individual or a group
influence over others? We answer by dividing the bases or sources of
power into two general groupings—formal and personal—and then
breaking each of these down into more specific categories.
• Formal Power -Formal power is based on an individual’s position in an
organization. It can come from the ability to coerce or reward, or from
formal authority.
Formal Power
• Coercive Power The coercive power base depends on fear of the
negative results from failing to comply. It rests on the application, or
the threat of application, of physical sanctions such as the infliction of
pain, frustration through restriction of movement, or the controlling
by force of basic physiological or safety needs.
• At the organizational level, A has coercive power over B if A can
dismiss, suspend, or demote B, assuming B values his or her job. If
A can assign B work activities B finds unpleasant, or treat B in a
manner B finds embarrassing, A pos- sesses coercive power over B.
• Coercive power can also come from withholding key information.
Formal Power
• Reward Power The opposite of coercive power is reward power ,
with which people comply because it produces positive benefits;
someone who can distribute rewards others view as valuable will
have power over them. These rewards can be either financial—such
as controlling pay rates, raises, and bonuses—or nonfinancial,
including recognition, promotions, interesting work assignments,
friendly colleagues, and preferred work shifts or sales territories.
Formal Power
• Legitimate Power In formal groups and organizations, probably the
most common access to one or more of the power bases is through
legitimate power . It represents the formal authority to control and
use organizational resources based on structural position in the
organization. Legitimate power is broader than the power to coerce
and reward. Specifically, it includes members’ acceptance of the
authority of a position. We associate power so closely with the
concept of hierarchy that just drawing longer lines in an organization
chart leads people to infer the leaders are especially powerful, and
when a powerful executive is described, people tend to put the
person at a higher position when drawing an organization chart.
Personal Power
• Many of the most competent and productive chip designers at Intel
have power, but they aren’t managers and have no formal power.
What they have is personal power , which comes from an
individual’s unique characteristics.
• There are two bases of personal power: expertise and the respect
and admiration of others.
Personal Power
• Expert Power Expert power is influence wielded as a result of
expertise, special skill, or knowledge. As jobs become more
specialized, we become increasingly dependent on experts to achieve
goals. It is generally acknowledged that physi- cians have expertise
and hence expert power: Most of us follow our doctor’s advice.
Computer specialists, tax accountants, economists, industrial
psycholo- gists, and other specialists wield power as a result of their
expertise.
Personal Power
• Referent Power Referent power is based on identification with a
person who has desirable resources or personal traits. If I like,
respect, and admire you, you can exercise power over me because I
want to please you. Referent power develops out of admiration of
another and a desire to be like that person. It helps explain, for
instance, why celebrities are paid millions of dollars to endorse
products in commercials.
Which Bases/ways of Power Are Most
Effective?
• Of the three bases of formal power (coercive, reward, legitimate) and
two bases of personal power (expert, referent), which is most
important to have?
• Research suggests pretty clearly that the personal sources of power
are most effective. Both expert and referent power are positively
related to employees’ satisfaction with supervision, their
organizational commitment, and their per- formance, whereas reward
and legitimate power seem to be unrelated to these outcomes. One
source of formal power—coercive power—actually can backfire in
that it is negatively related to employee satisfaction and commitment.
Dependence: The Key to Power
• The most important aspect of power is that it is a function of dependence
• What Creates Dependence?
• Dependence increases when the resource you control is important, scarce,
and nonsubstitutable.
• Importance If nobody wants what you have, it’s not going to create
depen- dence. Because organizations, for instance, actively seek to avoid
uncertainty, 14 we should expect that individuals or groups that can
absorb uncertainty will be perceived as controlling an important resource.
A study of industrial organiza- tions found their marketing departments
were consistently rated the most pow- erful. At Procter & Gamble,
marketing is the name of the game, and marketers are the most powerful
occupational group.
Power Tactics delegation of powers
• What power tactics do people use to translate power bases into
specific action? What options do they have for influencing their
bosses, co-workers, or employees? How do you make others agree
with you?How do you get power of become powerful?
• In this section, we review popular tactical options and the conditions
that may make one more effective than another. Research has
identified nine distinct influence tactics:
Power Tactics
• Legitimacy. Relying on your authority position or saying a request
accords with organizational policies or rules.
• Rational persuasion. Presenting logical arguments and factual
evidence to demonstrate a request is reasonable.
• Inspirational appeals. Developing emotional commitment by
appealing to a target’s values, needs, hopes, and aspirations.
• Consultation. Increasing the target’s support by involving him or
her in deciding how you will accomplish your plan.
• Exchange. Rewarding the target with benefits or favors in exchange
for following a request.
Power Tactics
• Personal appeals. Asking for compliance based on friendship or
loyalty.
• Ingratiation. Using flattery, praise, or friendly behavior prior to
making a request. Pressure. Using warnings, repeated demands,
and threats.
• Coalitions. Enlisting the aid or support of others to persuade the
target to agree.
Power Tactics
• Some tactics are more effective than others. Rational persuasion, inspira-
tional appeals, and consultation tend to be the most effective, especially
when the audience is highly interested in the outcomes of a decision
process. Pressure tends to backfire and is typically the least effective of the
nine tactics. You can also increase your chance of success by using two or
more tactics together or sequentially, as long as your choices are
compatible.
• People in different countries prefer different power tactics. Those from
individualistic countries tend to see power in personalized terms and as a
legitimate means of advancing their personal ends, whereas those in
collectiv- istic countries see power in social terms and as a legitimate
means of helping others
Controlling
• What is controlling? It’s the process of monitoring, comparing, and correcting work
performance. All managers should control even if their units are performing as planned
because they can’t really know that unless they’ve evaluated what activities have been
done and compared actual performance against the desired standard.
• Effective controls ensure that activities are completed in ways that lead to the
attainment of goals. Whether controls are effective, then, is determined by how well
they help employees and managers achieve their goals.
• Why is control so important? Planning can be done, an organizational structure created
to facilitate efficient achievement of goals, and employees motivated through effective
leadership. But there’s no assurance that activities are going as planned and that the
goals employees and managers are working toward are, in fact, being attained.
• Control is important, therefore, because it’s the only way that managers know whether
organizational goals are being met and if not, the reasons why. The value of the control
function can be seen in three specific areas: planning, empowering employees, and pro-
tecting the workplace.
The control process
Step 1. Measuring Actual Performance
• To determine what actual performance is, a manager must first get information
about it. Thus, the first step in control is measuring.
• HOW WE MEASURE. Four approaches used by managers to measure and report
actual performance are personal observations, statistical reports, oral reports,
and written reports.
• WHAT WE MEASURE. What is measured is probably more critical to the control
process than how it’s measured. Why? Because selecting the wrong criteria can
create serious problems. Besides, what is measured often determines what
employees will do. What control criteria might managers use? or instance, a
manager at a pizza delivery location might use mea- sures such as number of
pizzas delivered per day, average delivery time, or number of coupons redeemed.
•
Step 2. Comparing Actual Performance Against the
Standard
• The comparing step determines the variation between actual
performance and the standard. Although some variation in
performance can be expected in all activities, it’s critical to de-
termine an acceptable range of variation (see Exhibit 18-4).
Deviations outside this range need attention.
Step 3. Taking Managerial Action
• Managers can choose among three possible courses of action: do nothing, correct the ac- tual
performance, or revise the standards. Because “do nothing” is self-explanatory, let’s look at the
other two.
• CORRECT ACTUAL PERFORMANCE. Sports coaches understand the importance of correcting
actual performance. During a game, they’ll often correct a player’s actions. But if the problem is
recurring or encompasses more than one player, they’ll devote time during practice before the
next game to correcting the actions. That’s what managers need to do as well.
• Depending on what the problem is, a manager could take different corrective actions.
• For instance, if unsatisfactory work is the reason for performance variations, the manager could
correct it by things such as training programs, disciplinary action, changes in com- pensation
practices, and so forth. One decision that a manager must make is whether to take immediate
corrective action, which corrects problems at once to get performance back on track, or to use
basic corrective action, which looks at how and why performance deviated before correcting the
source of deviation.
• REVISE THE STANDARD. It’s possible that the variance was a result of an unrealistic standard—too
low or too high a goal. In that situation, the standard needs the corrective action, not the
performance.
Types of control
• feedforward control-the key to feedforward controls is taking managerial action before a
problem occurs. That way, problems can be prevented rather than having to correct
them after any damage (poor-quality products, lost customers, lost revenue, etc.) has
already been done. However, these controls require timely and accurate information that
isn’t always easy to get. Thus, managers frequently end up using the other two types of
control.
• Concurrent control, as its name implies, takes place while a work activity is in progress.
For instance, Nicholas Fox is director of business product management at Google. He and
his team keep a watchful eye on one of Google’s most profitable businesses—online ads.
They watch “the number of searches and clicks, the rate at which users click on ads, the
revenue this generates—everything is tracked hour by hour, compared with the data
from a week earlier and charted.” If they see something that’s not working particularly
well, they fine-tune it. The best-known form of concurrent control is direct supervision.
Another term for it is management by walking around,
• FEEDBACK CONTROL. The most popular type of control relies on feedback. In feedback
control, the control takes place after the activity is done.
Types of Control
• Financial control
• Information Control- MIS control
• Control of theft
Coordination
• Coordination is the essence of management or manager ship, for the achievement of
harmony of individual effort towards the accomplishment of group goals. It is a process
by which the manager achieves harmonious group effort and unity of action in the
pursuit of a common purpose. The manager brings about this process as he performs the
basic managerial functions of planning, organising, staffing, directing and controlling.
• Henry Fayol, “To co-ordinate is to harmonise all the activities of a person in order to
facilitate its working and its success.” Co-ordination is necessary to enable a person to
improve his functions. Without co-ordination, working cannot be harmonised.
• George Terry, “Co-ordination deals with the task of blending efforts in order to ensure
successful attainment of an objective. It is accomplished by means of planning,
organising, actuating and controlling.” The aim of co-ordination is to achieve better
results and this may be done in different ways. Different managerial functions are also
used to attain organisational goals.
Coordination – Steps for Effective Coordination

• in order to overcome the mentioned problems of co-ordination and get effective

co-ordination, the management should follow the following steps –
• 1. There should be a proper delegation of authority and responsibility at all levels
of management.
• 2. The whole or entire activities of the organisation should be divided
department-wise or section-wise according to the size of the organisation.
• 3. Preparing and adherence to rigid rules and regulations, procedures, policies,
etc.
• 4. Establishment of an effective communication system.
• 5. Establishment of employees’ grievances cell.
• 6. There should be a proper system for reporting.
• 7. Skilled workers are to be rewarded adequately.
• 4.7 Ethics, Integrity and responsibility in business/service like
institution
• http://www.siddhabhatta.com/2019/08/tqm-tools-and-techniques-
of-total.html
4.7 Ethics, Integrity and responsibility in
business/service like institution
• social responsibility as a business’s intention, beyond its legal and economic obligations,
to do the right things and act in the ways that are good for society.
• Business obeys the laws and cares for its stockholders, but adds an ethical imperative to
do those things that make society better and not to do those that make it worse. A
socially responsible organization does what is right because it feels it has an ethical
responsibility to do so.
• The concept of social responsibility has been described in different ways. For instance,
it’s been called “profit making only,” “going beyond profit making,” “any discretionary
corpo- rate activity intended to further social welfare,” and “improving social or
environmental conditions.”2 We can understand it better if we first compare it to two
similar concepts: social obligation and social responsiveness. Social obligation is when a
firm engages in social actions because of its obligation to meet certain economic and
legal responsibilities.
• The organization does what it’s obligated to do and nothing more. This idea reflects the
classical view of social responsibility, which says that management’s only social
responsibility is to maximize profits.
• The other two concepts—social responsiveness and social responsibility—reflect the
socioeconomic view, which says that managers’ social responsibilities go beyond mak-
ing profits to include protecting and improving society’s welfare. This view is based on
the belief that corporations are not independent entities responsible only to
stockholders, but have an obligation to the larger society.
• Social responsiveness is when a company engages in social actions in response to
• some popular social need. Managers are guided by social norms and values and make
practical, market-oriented decisions about their actions. For instance, Ford Motor
Company
• became the first automaker to endorse a federal ban on sending text messages while
driving. A company spokesperson said that, “The most complete and most recent
research shows that activity that draws drivers’ eyes away from the road for an extended
period while driving, such as text messaging, substantially increases the risk of accidents
• You can write all matters from corporate social responsibility we have studied earlier
Should business go for Social Responsibility?
• Corporate Social Responsibility (CSR) and social responsibility are related
concepts but they are not exactly the same. Here’s how they differ:
1.Corporate Social Responsibility (CSR):
1. CSR refers specifically to the responsibility that corporations have towards society
beyond their primary goal of making profits.
2. It involves initiatives and actions undertaken voluntarily by businesses to operate in
an economically, socially, and environmentally sustainable manner.
3. CSR initiatives often include activities such as philanthropy, community service
projects, environmental sustainability efforts, ethical labor practices, and more.
4. CSR is typically seen as a strategic approach by corporations to integrate social and
environmental concerns into their business operations and interactions with
stakeholders.
Social Responsibility:
1. Social responsibility, on the other hand, is a broader concept that applies to individuals,
organizations (including corporations), and governments.
2. It encompasses the duty or obligation to act in ways that benefit society at large.
3. Social responsibility can apply to any entity's actions or decisions that impact society,
including ethical behavior, sustainability practices, contributing to community welfare, and
respecting human rights.
4. It is a moral and ethical framework that guides how individuals and organizations should
behave towards others and the environment.
• In essence, CSR is a specific subset of social responsibility that focuses on the
obligations and contributions of corporations towards society. It involves
corporations going beyond legal requirements to address societal issues and
contribute positively to communities and the environment. Social responsibility,
however, is a broader concept that applies to all entities and individuals and
encompasses a wider range of ethical considerations and actions beyond just
corporate behavior.
Management Ethics
What is ethics? नैधतकता
• Ethics are the principles, values, and beliefs that define right and
wrong decisions and behavior. Many decisions that managers make
require them to consider both the process and who’s affected by the
result
Key Principles of Management Ethics:
1.Integrity (mixture): Integrity is the foundation of ethical conduct in management,
encompassing honesty, transparency, and consistency in words and actions. Managers
must adhere to high moral standards, act with sincerity, and uphold the trust placed in
them by stakeholders.
2.Respect: Respect for human dignity, diversity, and individual rights is paramount in
management ethics. Managers must treat employees, customers, suppliers, and other
stakeholders with fairness, dignity, and empathy, valuing their perspectives and
contributions.
3.Fairness: Fairness entails treating all individuals equitably and impartially, without
favoritism, discrimination, or bias. Managers must ensure that decisions and actions are
based on merit, justice, and respect for the rule of law.
4.Accountability: Accountability requires managers to take responsibility for their decisions
and actions, acknowledging mistakes, and learning from failures. They must be
accountable to stakeholders, transparently reporting performance, risks, and outcomes.
5.Social Responsibility: Social responsibility entails considering the broader impact of
organizational decisions and actions on society, communities, and the environment.
Managers must balance economic objectives with ethical considerations, promoting
sustainability, ethical sourcing, and corporate citizenship.
Factors That Determine Ethical and Unethical
Behavior
• Whether someone behaves ethically or unethically when faced with
an ethical dilemma is influenced by several things: his or her stage of
moral development and other moderating variables including
individual characteristics, the organization’s structural design, the
organization’s culture, and the intensity of the ethical issue. (See
Exhibit 5-3.)
• People who lack a strong moral sense are much less likely to do the
wrong things if they’re constrained by rules, policies, job descriptions,
or strong cultural norms that disapprove of such behaviors.
Conversely, intensely moral individuals can be corrupted by an
organizational structure and culture that permits or encourages
unethical practices.
Factors that Determine Ethical and Unethical
Behavior
INDIVIDUAL CHARACTERISTICS.
• Two individual characteristics—values and personality— play a role in
determining whether a person behaves ethically. Each person comes
to an organization with a relatively entrenched set of personal values,
which represent basic convictions about what is right and wrong. Our
values develop from a young age based on what we see and hear
from parents, teachers, friends, and others. Thus, employees in the
same organization often possess very different values.
STRUCTURAL (organization structure)
VARIABLES
• An organization’s structural design can influence whether employees
behave ethically. Those structures that minimize ambiguity and
uncertainty with formal rules and regulations and those that
continuously remind employees of what is ethical are more likely to
encourage ethical behavior. Other structural variables that influence
ethical choices include goals, performance appraisal systems, and
reward allocation procedures.
Organization Culture
• Organization culture consists of the shared organizational values.
These values reflect what the organization stands for and what it
believes in as well as create an environment that influences employee
behavior ethically or unethically.
• When it comes to ethical behavior, a culture most likely to encourage
high ethical standards is one that’s high in risk tolerance, control, and
conflict tolerance. Employees in such a culture are encouraged to be
aggressive and innovative, are aware that unethical practices will be
discovered, and feel free to openly challenge expectations they
consider to be unrealistic or personally undesirable.
Other factors
• Ethical and unethical behavior can be influenced by a variety of factors, including individual,
organizational, and societal elements. Here are some key factors that contribute to both ethical
and unethical behavior:
1. Leadership: The behavior and ethical standards demonstrated by leaders within an organization
set the tone for ethical behavior among employees. Ethical leadership encourages adherence to
ethical guidelines, while unethical leadership can promote a culture of misconduct.
2. Peer Influence: Co-workers and peers can influence ethical decision-making through social norms
and pressures. Group dynamics and peer behavior can either support or undermine ethical
choices.
3. Laws and Regulations: Legal standards and regulatory requirements provide a framework for
ethical behavior in many industries. Compliance with laws helps define the boundaries of
acceptable conduct.
4. Ethical Codes and Guidelines: Many professions and organizations have established ethical codes
or guidelines that outline expected behaviors and standards. Adherence to these codes can guide
decision-making.
1. Consequences and Accountability: The potential consequences of behavior, both positive and negative, can
impact ethical decision-making. Systems that enforce accountability for unethical behavior help deter
misconduct.
2. Personal Motivation and Incentives: Individual motivations, such as financial rewards or career
advancement, can sometimes conflict with ethical considerations. Incentive structures within organizations
can influence behavior.
3. Cultural and Societal Norms: Cultural values and societal norms shape perceptions of ethical behavior. What
is considered acceptable in one culture may differ from another, influencing behavior accordingly.
4. Psychological Factors: Individual psychological factors, such as moral development, cognitive biases, and
situational pressures, can also affect ethical decision-making.
5. Technology and Globalization: Advancements in technology and the interconnected nature of global
business can present new ethical challenges and opportunities, requiring adaptation of ethical frameworks.
6. Risk Perception: How individuals perceive the risks associated with unethical behavior versus the benefits
can sway their decision-making process.
• Understanding these factors can help individuals and organizations foster environments that promote ethical
behavior and mitigate risks of unethical conduct. Ethical decision-making involves a complex interplay of
these factors, requiring conscious effort and commitment to uphold ethical standards in various contexts.
Strategies for Promoting Management
Ethics:
• Employee selection :The selection process (interviews, tests, background
checks, and so forth) should be viewed as an opportunity to learn about an
individual’s level of moral development, peronal values, ego strength, and
locus of control.
• Codes of Ethics : A code of ethics, a formal statement of an organization’s
values and the ethical rules it expects employees to follow, is a popular
choice for reducing that ambiguity.
• Ethical Training
• Leadership
• Organization culture
Strategies for Promoting Management
Ethics:
1.Lead by Example: Managers should exemplify ethical behavior and
integrity in their actions, serving as role models for employees.
2.Establish Ethical Standards: Organizations should develop clear codes of
conduct, ethics policies, and guidelines to provide guidance on acceptable
behavior and decision-making.
3.Promote Ethical Awareness: Training programs, workshops, and
communication channels can raise awareness of ethical issues and
dilemmas, encouraging employees to discuss and address them openly.
4.Encourage Whistleblowing: Organizations should establish mechanisms
for employees to report unethical behavior or violations of ethical
standards without fear of retaliation, ensuring accountability and
transparency.
5.Reward Ethical Behavior: Recognizing and rewarding employees who
demonstrate ethical behavior reinforces the importance of ethics and
encourages others to follow suit.
Group Dynamics and Team Work
Basic group concepts and classification
• We define a group as two or more individuals, interacting and
interdependent, who have come together to achieve particular
objectives.
• Groups can be either formal or informal.
• By a formal group , we mean one defined by the organization’s
structure, with designated work assignments establishing tasks. In
formal groups, the behaviors team members should engage in are
stipulated by and directed toward organizational goals. The six
members of an airline flight crew are a formal group.
Group Classification
• In contrast, an informal group is neither formally structured nor
organizationally determined.
• Informal groups are natural formations in the work environment that
appear in response to the need for social contact. Three employees
from different departments who regularly have lunch or coffee
together are an informal group. These types of interactions among
individuals, though informal, deeply affect their behavior and
performance.
Why Do People Form Groups? advantages
• Social identity theory proposes that people have emotional reactions
to the failure or success of their group because their self-esteem gets
tied into the group’s performance.
• When your group does well, you bask in reflected glory, and your own
self-esteem rises. When your group does poorly, you might feel bad
about yourself, or you might even reject that part of your identity, like
“fair weather fans.” Social identities also help people reduce
uncertainty about who they are and what they should do
Why Do People Form Groups?
• When do people develop a social identity? Several characteristics
make a social identity important to a person:
• Similarity. Not surprisingly, people who have the same values or
char- acteristics as other members of their organization have higher
levels of group identification. Demographic similarity can also lead to
stronger
Why Do People Form Groups?
• Status. Because people use identities to define themselves and
increase self- esteem, it makes sense that they are most interested in
linking themselves to high-status groups. Graduates of prestigious
universities will go out of their way to emphasize their links to their
alma maters and are also more likely to make donations
• Uncertainty reduction. Membership in a group also helps some
people understand who they are and how they fit into the world. 10
One study showed how the creation of a spin-off company created
questions about how employees should develop a unique identity
that corresponded more closely to what the division was becoming
• Benefit assurance
Stages of Group Development
• The Five-Stage Model , the five-stage group-development model
characterizes groups as proceeding through the distinct stages of
forming, storming, norming, performing, and adjourning.
• The first stage, forming stage , is characterized by a great deal of
uncertainty about the group’s purpose, structure, and leadership.
Members “test the waters” to determine what types of behaviors are
acceptable. This stage is complete when members have begun to
think of themselves as part of a group.
Stages of Group Development
• The storming stage is one of intragroup conflict. Members accept
the existence of the group but resist the constraints it imposes on
individuality. There is conflict over who will control the group. When
this stage is complete, there will be a relatively clear hierarchy of
leadership within the group.
• In the third stage, close relationships develop and the group
demonstrates cohesiveness. There is now a strong sense of group
identity and camaraderie. This norming stage is complete when
the group structure solidifies and the group has assimilated a
common set of expectations of what defines correct member
behavior.
Stages of Group Development
• The fourth stage is performing . The structure at this
point is fully functional and accepted. Group energy has
moved from getting to know and understand each other
to performing the task at hand. For permanent work
groups, performing is the last stage in development.
• However, for temporary committees, teams, task forces,
and similar groups that have a limited task to perform, the
adjourning stage is for wrapping up activities and
preparing to disband. Some group members are upbeat,
basking in the group’s accomplishments. Others may be
depressed over the loss of camarade- rie and friendships
gained during the work group’s life.
Group Decision Making
• Strengths of Group Decision Making
• Groups generate more complete information and knowledge.
• Effectiveness and Efficiency Whether groups are more effective than
individuals depends on how you define effectiveness.
• Group decisions are generally more accurate than the decisions of the
average individual in a group, but less accurate than the judgments of the
most accurate.
• In terms of speed, individuals are superior. If creativity is important,
groups tend to be more effective.
• And if effectiveness means the degree of acceptance the final solution
achieves, the nod again goes to the group.
Group Decision Making
• Weaknesses of Group Decision Making Group decisions
are time consuming because groups typically take more
time to reach a solution. There are conformity pressures.
• The desire by group members to be accepted and
considered an asset to the group can squash any overt
disagreement. Group discussion can be dominated by
one or a few members.If they’re low- and medium-ability
members, the group’s overall effectiveness will suffer.
• Finally, group decisions suffer from ambiguous re-
sponsibility. In an individual decision, it’s clear who is
accountable for the final outcome. In a group decision,
the responsibility of any single member is diluted.
Group Decision-Making Techniques
• The most common form of group decision making takes place in
interacting groups .
• Members meet face to face and rely on both verbal and nonverbal
interaction to communicate. But as our discussion of groupthink
demonstrated, interacting groups often censor themselves and
pressure individual members toward conformity of opinion.
• Brainstorming, the nominal group technique, and electronic
meetings can reduce problems inherent in the traditional interacting
group.
Group Decision-Making Techniques
• Brainstorming can overcome the pressures for conformity that
dampen creativity by encouraging any and all alternatives while
withholding criticism.
• In a typical brainstorming session, a half-dozen to a dozen people sit
around a table. The group leader states the problem in a clear
manner so all participants understand.
• Members then freewheel as many alternatives as they can in a given
length of time.
• Brainstorming may indeed generate ideas—but not in a very efficient
manner.
Group Decision-Making Techniques
• The nominal group technique restricts discussion or interpersonal
communication during the decision-making process, hence the term
nominal. Group members are all physically present, as in a traditional
committee meeting, but they operate independently. Specifically, a
problem is presented and then the group takes the following steps:
• 1. Before any discussion takes place, each member independently writes
down ideas on the problem.
• 2. After this silent period, each member presents one idea to the group.
No discussion takes place until all ideas have been presented and recorded.
• 3. The group discusses the ideas for clarity and evaluates them.
• 4. Each group member silently and independently rank-orders the ideas.
The idea with the highest aggregate ranking determines the final decision.
Group Decision-Making Techniques
• electronic meeting:
• Once the required technology is in place, the concept is simple. Up to
50 people sit around a horseshoe-shaped table, empty except for a
series of networked laptops.
• Issues are presented to them, and they type their responses into their
computers. These individual but anonymous comments, as well as
aggregate votes, are displayed on a projection screen. This technique
also allows people to be brutally honest without penalty. And it’s fast
because chitchat is eliminated, discussions don’t digress, and many
participants can “talk” at once without stepping on one another’s
toes.
Differences Between Groups and Teams
• Group are two or more individuals, interacting and interdependent,
who have come together to achieve particular objectives. A work
group is a group that interacts primarily to share information and
make decisions to help each member perform within his or her area
of responsibility.
• Work groups have no need or opportunity to engage in collective
work that requires joint effort. So their performance is merely the
summation of each group member’s individual contribution. There is
no positive synergy that would create an overall level of performance
greater than the sum of the inputs.
Differences Between Groups and Teams
• A work team , on the other hand, generates positive synergy through
coordinated effort. The individual efforts result in a level of
performance greater than the sum of those individual inputs.
• Teams are more flexible and responsive to changing events than
traditional departments or other forms of permanent groupings. They
can quickly assemble, deploy, refocus, and disband.
Differences Between Groups and Teams
• If management hopes to gain increases in organizational performance
through the use of teams, its teams must possess these.
• Teams can make products, provide services, negotiate deals,
coordinate projects, offer advice, and make decisions
Types of Teams
• Four most common types of teams in an organization: problem-
solving teams, self- managed work teams, cross-functional teams ,
and virtual teams
Problem-Solving Teams
• In the past, teams were typically composed of 5 to 12 hourly
employees from the same department who met for a few hours each
week to discuss ways of improving quality, efficiency, and the work
environment.
• These problem-solving teams rarely have the authority to unilaterally
implement any of their suggestions.
• Merrill Lynch created a problem-solving team to figure out ways to re-
duce the number of days it took to open a new cash management
account.
Self-Managed Work Teams
• Self-managed work teams are groups of employees
(typically 10 to 15 in number) who perform highly related
or interdependent jobs and take on many of the
responsibilities of their former supervisors.
• Typically, these tasks are planning and scheduling work,
assigning tasks to members, making operating decisions,
taking action on problems, and working with suppliers
and custom- ers. Fully self-managed work teams even
select their own members and evaluate each other’s
performance. Supervisory positions take on decreased
importance and are sometimes even eliminated.
• But research on the effectiveness of self-managed work
teams has not been uniformly positive. Self-managed
teams do not typically manage conflicts well. When
disputes arise, members stop cooperating and power
struggles ensue, which leads to lower group performance
Cross-Functional Teams
• cross-functional teams Employees from about the same
hierarchical level, but from different work areas, who come together
to accomplish a task.
• Many organizations have used horizontal, boundary-spanning groups
for decades.
• Cross-functional teams are an effective means of allowing people
from di- verse areas within or even between organizations to
exchange information, develop new ideas, solve problems, and
coordinate complex projects.
Virtual Teams
• Virtual teams use computer technology to unite
physically dispersed members and achieve a common
goal. They collaborate online—using communication
links such as wide-area networks, videoconferencing,
or e-mail—whether they’re a room away or
continents apart.
• Despite their ubiquity, virtual teams face special
challenges. They may suffer because there is less
social rapport and direct interaction among members.
Evidence from 94 studies entailing more than 5,000
groups found that virtual teams are better at sharing
unique information but they tend to share less
information overall