CHAPTER 6

THE DIRECTING / LEADING

FUNCTION

6.1 MEANING AND THE NEED FOR LEADERSHIP

MEANING:
Leading is the management function aimed at setting the members of an organization move in the
direction that will achieve its objectives. Directing builds a climate, provides leadership and
arranges the opportunity for motivation. Leading is not deriving or pushing from behind; it is
placing oneself before the group and facilitating progress and inspires followers to accomplish
organizational (group) objectives.

Leadership can be defined in different ways according to different writers. Some are:
 Leadership is the process of influencing others toward the achievement of organizational
objectives. This definition recognizes that leadership is typically an on going activity, is oriented
toward having an impact on the behaviors of others, and is ultimately focused on realizing the
specific aims of the organization.

 Leadership is the process of influencing a group or individual to set a goal or achieve a goal. It is a
process involving the leader, the led (group or individual), and a practical goal or a situation. It is
behavioral in nature and involves personal interaction.

 Leadership is the art or process of influencing people so that they will strive willingly and
enthusiastically toward the achievement of organizational or group goals.

 Leadership is the ability to secure desirable actions from a group of followers voluntarily without
the use of coercion or force.

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 As we can see from the above definitions, leadership has three ingredients: leader, led (follower) and
goal (situation) – organizational Environment.

Leader- the one with the ability/capacity to understand others‟ motivation and to inspire them with the
ability to create a climate for motivation.
Follower (led) - the individuals being led or influenced
Environment- the working environment in which the leader interacts with the followers.

THE NEED FOR LEADERSHIP

The need for leadership can be explained by the fact that organizations will never be successful unless
they have effective and efficient leaders. Whatever amount of capital invested and technology an
organization has, without effective leadership the organization will not be successful.

The importance of the directing function in the organization can be presented as follows:
• Directing initiates actions by giving directives and guidance to employees.
• Directing integrates employees‟ effort by coordinating actions of the members and leading toward the
objectives.
• Directing attempts to get the maximum output of individuals by providing ways to fully utilize the
potentials and capabilities of employees.
• Directing facilitates changes by incorporating (adopting) environmental and internal changes into the
organization
• Directing provides stability by balancing the different parts of the organization so that it exists for a long
period and its parts work in a harmonious ways.

The directing function enables subordinates to contribute their best to attain the goal of the organization.
Thus, managers should try to integrate both organizational and individual objectives in order to get the
work done by subordinates. Managers must be good leaders (by providing effective leadership) to guide,
counsel, and influence subordinates so as to win their confidence and acceptance.

How leaders influence others?

Why do people accept the influence of a leader? One major reason is that leaders have power. Power is
the capacity to affect the behavior of others, in other words, power is the ability of individuals or groups

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 to induce or influence the beliefs or actions of other persons or groups. It is a resource or patronage an
individual has at his/her disposal to stage-manage others towards a wanted behavior. Having power can
increase the effectiveness of a manager by enabling the manager to influence people to what is wanted.
Leaders in organizations typically rely on some or all of five major types of power: legitimate, reward,
coercive, expert and referent.

1. Legitimate power/position power refers to the power a leader possesses as a result of occupying a
particular position or role in the organization, i.e. it is a power that stems from a position‟s placement
in the managerial hierarchy. It corresponds to authority. Legitimate power exists when a subordinate or
the influenced acknowledges that the influencer has a “right” or is lawfully entitled to influence within
certain bounds. It is related to the position, rather than to the person personality, so it is clearly a
function of the leader's position in the organization and is completely independent of any of the
leader's personal characteristics. Thus, the higher a manager is in the organizational hierarchy, the
greater is the “perceived power” thought by subordinates.

2. Reward Power refers to the leader's capacity to give or withhold rewards for followers. It is based on
the capacity to control and provide valued rewards to others. Rewards that may be under the control of
individual manager include salary increases /pay raises, bonus, interesting projects, promotion
recommendations, a better office, support for training programs, assignments with high responsibility
in the organization, recognition, positive feedback etc. Purchasing agents, with little position power;
might be able to exercise considerable influence by their ability to expedite or delay a much-needed
spare part. Or University professors have considerable reward power; they can grant or withhold high
grades. The greater a manager‟s control over valued rewards, the greater the manager's reward power
and the more power to influence.

3. Coercive Power is a power based on fear. It is the negative side of reward power. Coercive power is
the ability to coerce or punish the influencees/followers when they do not engage in desired behaviors.
Forms of coercion or punishment include criticisms, terminations, reprimands, suspensions, warning
letters that go into an individual‟s personnel file, negative performance appraisals, demotions and
withheld pay raises; (punishment may range from loss of a minor privilege to loss of one's job).

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 Coercive power is usually used to maintain a minimum standard performance or conformity among
subordinates. The greater the freedom to punish others, the greater a manager‟s coercive power. And
the more coercive power a manager uses, the more resentment and opposition s/he faces from
subordinates.

4. Expert Power refers to power that a leader possesses as a result of his or her knowledge and expertise
regarding the tasks to be performed by subordinates. It is power based on the possession of expertise,
knowledge, skill or information. To the extent that a leader possesses expertise and information that is
needed or desired by others, the leader has expert power. Physicians, lawyers, and university
professors may have considerable influence on others because they are respected for their special
knowledge. A manger who is capable of achieving an important methodological break through that no
other companies dreamed of and a secretary who knows how to unreveal or reveal bureaucratic red
tape all have expert power over any one who needs that information.

5. Referent Power / Charismatic Power is power that results from being admired, personally identified
with or liked by others. When we admire people, want to be like them, or feel friendship toward them,
we more willingly follow their directions and exhibit loyalty toward them. For example, a Movie Star,
a Great Athlete, a Great Football Player, a Musician or a Military Hero might possess considerable
referent power.

 The strength of referent power is directly related to such factors as the amount of prestige and
admiration the influence confers up on the influencer.

 The more that a leader is able to cultivate the liking, identification, and admiration of others, the
greater the referent power.

 The more power a leader has at his/her disposal, the more likely that s/he will be successful in
influencing followers to do the work assigned to them except coercive power.

Although all five types of power are potential means of influencing others, in actual usage they may
engender somewhat different levels of subordinate motivation. Subordinates can react to a leader‟s

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direction with commitment, compliance, or resistance. With commitment, employees respond
enthusiastically and exert a high level of effort toward organizational goals. With compliance, employees
exert at least minimal efforts to complete directives but are likely to deliver average, rather than stellar,
performance. With resistance, employees may appear to comply but actually do the absolute minimum,
possibly even attempting to sabotage the attainment of organizational goals.

Types of outcome
Source of Basis for power Commitment Compliance Resistance
Leader
influences
Referent Admiration and Likely* Possible Possible
power liking by others. If request is believed If request is If request is
to be important to perceived to be something that
leader unimportant to will harm leader
leader
Expert Possession of Likely* Possible Possible
power valued expertise If request is If request is If leader is
persuasive and persuasive but arrogant and
subordinates share subordinates are insulting or
leader‟s task goals apathetic about task subordinates
goal oppose task
goals
Legitimate Hierarchical Possible Likely* Possible
power position and If request is polite If request or order If arrogant
authority and very appropriate is seen as legitimate demands are
made or request
does not appear
proper
Reward Capacity to Possible Likely* Possible

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 power provide valued If used in a subtle, If used in a If used in a
rewards very personal way mechanical, manipulative,
impersonal way arrogant way
Coercive Ability to punish Very unlikely Possible Likely*
power If used in a helpful, If used in a
non punitive way hostile or
manipulative
way
* Indicates most common outcome
Major sources of leader power and likely subordinate reactions

Authority versus Power

Authority Power
1. It is positional – it will be there when the 1. It is personal-it exists because of the
incumbent leaves. person.
2. Narrower – it is one type of power 2. Broader
3. It changes with changes in position. 3. Some types of power do not
change(Expert, referent) but some
change legitimate, reward,
coercive.

4. Authority is delegated to an individual 4. Not all types power can be delegated

by superiors (Expert andreferent).

6.2 Concept and meanings of Leadership theories

A. Trait Theory
Traits are distinctive internal/personal qualities or characteristics of an individual, such as physical
(height, weight, appearance, health, etc), personal (self-confidence, dominance, adaptable,

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extroversion/sociability, originality etc) and mental (intelligence, creativity, knowledge, technical
competence etc). A leader trait is a physical or personality characteristic that can be used to differentiate
leaders from followers.

Trait theory attempts to find traits that make a leader. That is, it is a theory, the old approach, which
focused on identifying the personal traits that differentiated leaders from followers. Trait theory originated
from an ancient theory called “Great Man” theory that assumes that “leaders are born not made”-a belief
dating back to the ancient Greeks and Romans.

The idea in trait theory was to see whether certain traits would predict the individuals who would emerge
(be identified by members of the group) as leaders.
In searching for measurable leadership traits, researchers took two approaches:
1) They attempted to compare the traits of those who emerged as leaders with the traits of those who did
not.
2) They attempted to compare the traits of effective leaders with those of ineffective leaders.

Studies that were conducted on the first category have failed to distinguish/uncover any traits that clearly
and consistently distinguish leaders from followers. Leaders as a group have been found to be somewhat
taller, brighter, more extroverted, persistent and more self-confident than non-leaders. However, millions
of people have these traits, but most of them obviously will never attain a leadership position. In addition,
many established leaders did not and do not have these traits. (Napoleon, for example, was quite short,
and Lincoln was moody and introverted.) Interestingly enough, studies have also found that people who
are too intelligent compared with other group members do not emerge as leaders-perhaps because they are
too different or too far removed from the group.

Studies that were conducted on the second category have generally failed to isolate traits that are strongly
associated with successful leadership.

Generally, the efforts to identify universal leadership traits ran into difficulties for the following reasons:
1. Not all leaders possess all the traits and many non-leaders may possess most of the traits.
2. It gives no guidance as to the magnitude of each trait for a person to be a leader.

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3. No agreement has been reached as to what their relationships are to the actual instances of
leadership.
4. Traits tend to be a chicken-and-egg proposition i.e. Successful leaders may display traits such as good
vocabulary, education and self-confidence after they have assumed leadership positions.

B. Behavioral Theories
When it became evident that effective leaders did not seem to have any distinguishing traits or
characteristics, researchers tried to isolate the behaviors that made leaders effective. In other words, rather
than try to figure out what effective leaders were, researchers tried to determine what effective leaders
did, how they delegated tasks, how they communicated with and tried to motivate their subordinates, how
they carried out their tasks, and so no. This tries to answer the questions “What do effective leaders do?
What ineffective leaders don't do? How do subordinate react emotionally and behaviorally (performance)
to what the leader does?"

Two major dimensions of leader behavior emerged from this body of research; one deals with how leaders
get the job done and the other deals with how leaders treat and interact with their subordinates.

i. The University of Michigan Studies

Through interviewing leaders and followers, researchers at the University of Michigan identified two
distinct styles of leadership, referred to as .job-centered and employee - centered.
The job-centered leader practices close supervision on the subordinates‟ performance. This leader relies
on coercion, reward, and legitimate power to influence the behavior and performance of followers.
The employee-centered leader believes in delegating authority and supporting followers in satisfying
their needs by creating a supportive work environment. The employee centered leader is concerned with
followers', their personal advancement, growth and achievement.
ii. The Ohio State Studies
These studies isolated two leadership factors, referred to as initiating structure and consideration.
Initiating structure involves behavior in which the leader organizes and defines the relationship in
the group, tends to establish well-defined patterns and channels of communication, and spells out
ways of getting the job done.

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Consideration involves behavior indicating sensitiveness to subordinates, respect their ideas and
feelings, establishes mutual trust and friendship between the leader and the followers.

In short, the behavioral theory attempted to identify effective leader behaviors that would work in
every situation. But researchers found that leader behaviors that worked best in one situation were not
often as effective in other situations.

C. The Contingency /Situational Leadership Theory

Situational leadership theory grows out of an attempt to explain the inconsistent findings about traits and
styles /behaviors. Situational theory proposes that the effectiveness of a particular style of leader behavior
depends on the situation. As situations change, different styles become appropriate. This directly changes
the idea of one best style of leadership. In other words, the contingency/situational theory holds that
appropriate leader traits or behaviors are contingent or dependent on relevant situational characteristics.
More specifically, the contingency leadership theory states that, leadership is the result of the interaction
of:
a. Leaders: behavior and competence
b. Followers: behavior and competence
c. Situations: situational variables such as job characteristics, organizational policies, leaders member
relations (the extent to which a leader has the support of group members), position power (the amount
of power that the organization gives the leader to accomplish necessary tasks).

D. Theory X and Theory Y Assumptions about People

A manager‟s philosophy about work and the people who perform the work will influence his/her approach
to leadership. Douglas McGregor has hypothesized two sets of assumptions about people that serve as a
philosophical base for leadership action. These are Theory X and Theory Y Assumptions.

Theory X – pessimistic and negative

A manager basing an operating philosophy on Theory X would impose a directive leadership style on the
individual or work group s/he is supervising. Coercion, negative motivation, and refusal to allow
employee participate in decision-making would probably be the actions of the manager.
Why? Because the manager assumes:

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- The average human being has an inherent dislike of work and will avoid it if s/he can-workers are lazy.
- Because of this dislike, most people must be coerced, controlled, directed, and threatened with
punishment to get them to put forth adequate effort toward the achievement of organizational objectives.
- The average human being prefers to be directed, wishes to avoid responsibility, has relatively little
ambition and wants security above all.

McGregor‟s Theory X view of human nature holds that the dislike of work is so great that even the
promise of rewards will not overcome it. “People will accept the rewards and demand continually higher
ones, but these alone will not produce the necessary effort. Only the threat of punishment will do the trick.

Theory Y- adopts a developmental approach/ modern + positive set of assumptions

A manager with Theory Y assumption will prepare him/herself to work with people as individuals, to
involve people in the process of decision-making, to openly encourage people to seek responsibility and
to work with people achieve their goals.
Why? Because the manager assumes:
- The average human being does not inherently dislike work; the physical and mental effort involved is as
natural as play or rest.
- External control and threat of punishment are not the only means for bringing about effort toward
organizational objectives. A person will exercise self-direction and self control in the service of
objectives to which s/he is committed.
- People generally become committed to organizational objectives if they are rewarded for doing so.
- The average human being learns, under proper conditions, not only to accept, but also they seek
responsibility.
- Many people have a relatively high degree of imagination, ingenuity, and creativity in the solution of
organizational problems.
- The average person‟s intellectual potential is only partially utilized under the conditions of modern
industrial life.

The assumptions in Theory Y have remarkably different implications for managers than do those of
Theory X. Instead of blaming poor performance on basic human nature, Theory Y places squarely on
management the responsibility for tapping the reservoir of creativity, hard work, and imagination. The

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 worker‟s performance is limited only by management‟s ability to use human resources effectively. Theory
Y also has implications for decision-making. Because it recognizes worker‟s intellectual potential, this
philosophy suggests that organizational goals are best achieved if workers have voice in decisions.
Participatory decisions making is especially important as it relates to a person‟s job. In addition, Theory Y
vie of human nature implies that a manager‟s role is not to manipulate workers; rather, it is to create an
atmosphere in which workers can use their commitment and involvement to satisfy their personal needs as
well as those of the organization.
6.3.Concept and meaning of Leadership Styles
Leadership style is the relative consistent pattern of behavior that characterizes a leader. The style of
an organization's leadership is reflected in both the nature of that firm and its relationships
with the community. The style of its leader defines an organization The focus on finding leadership
style (behavior patterns of leaders) is on the relationship between leaders‟ action and the reaction of
subordinates emotionally and behaviorally. A manager‟s leadership style is composed of three parts:
i. How the manager chooses to motivate subordinates
Motivation approach
Positive Negative
Responsibility Threats
Recognition Coercion
Praise Fines
Security Suspensions
Monetary Rewards Termination
ii. His/her decision-making style: the degree of decision-making authority the manager grants to
subordinates.
iii. His/her areas of emphasis (orientation) in the work environment: Task orientation, employee orientation

Based on the above points there are three types of leadership styles: Autocratic, Democratic, and Laissez-
faire.

1. Authoritarian/Autocratic Leadership Style

It is closely associated with the classical approach to management. The manager who follows this style is
dogmatic and leads by the ability to withhold or give rewards and punishment, i.e. motivation is through

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 incentives and fear. In this style, decision-making is solely by the manager, in other words, the leader
retains all authority and responsibility. In the extreme case, the manager makes the decision and
announces it to the work group. There is no opportunity for input into the decision-making process by the
subordinates and communication is primarily downward. Variations of this approach find the manager
making the decision and then “Selling” it to employees or making the decision and allowing the group the
opportunity to ask questions. The autocratic leader is task-oriented and places little value on showing
consideration to subordinations as a leadership technique. The Autocratic manager uses Theory X
assumption as his philosophical base for leadership.

There are situations where managers are compelled/ forced to use this leadership style. Some are:
a. When there is a need to influence subordinates in favor of organizational objectives which has an
effect on individuals.
b. When subordinates are new, they need to be directed.
c. When the situation calls for unilateral decision-making – perhaps there is no enough time for quality
input from subordinates or the subordinates may lack information.

Limitations
- Employees‟/subordinates‟ ideas will not be used to solve organizational problems, which in some cases
subordinates may have better ideas than the superior about a particular problem.
- Subordinates would be demotivated, i.e. It may suppress individual initiative
- Poor implementation of decisions

2. Democratic/Participative Leadership Style

In this leadership style, the manager involves subordinates in making organizational decisions, shares
problems with them and shares authority to reach a decision. Subordinates take part in the decision-
making process through consultation. The leader delegates a great deal of authority while retaining
ultimate responsibility. Active two-way communication (upward and downward) exists. The democrat
leader uses Theory Y assumption as his/her philosophical base for leadership.

Limitations
1) Subordinates may be too involved to influence the manager even when there is no need.

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2) The manager may not be able to influence the subordinates to the extent needed.

However, the major advantage of this leadership style is that, it enhances personal commitment through
participation.

The advantages of democratic leadership style are the disadvantages of the autocratic leadership style
after we make them opposite.

3. Laissez-Faire/Free-Rein Leadership Style

In this leadership style, leaders generally give the group complete freedom, provide the necessary
materials, participate only to answer questions, and avoid decision-making whenever possible. The leader
either sets limits and the followers work out their own problems, or the individuals set their own goals. In
this style, leaders depend largely on subordinates to set their own goals and the means of achieving them,
and they see their role as one of aiding the operations of followers by furnishing them information and
acting primarily as a contact with the groups external environment, i.e. the leader‟s role is to serve as a
logistics specialist or representative of the group to outside groups. The leader denies responsibility and
abdicates authority to the group.

The application of Laissez-Faire style can be found with individuals or groups that the manager views as
being knowledgeable, independent, or motivated. Additionally, if the work group is composed of high
achievers, or is highly research oriented, this style has potential benefits.
Primarily horizontal communication among peers exists.

Limitations
- Group may drift aimlessly in the absence of direction from leader.
- It may make things out of control.

Advantages
- It gives quite freedom for subordinates
- It gives much responsibility and self guidance for subordinates
- It permits self-starters to do things as they see fit without leader

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4. Situational Leadership style
The situational leadership style states that for a manager to be democrat, autocratic or laissez-faire,
situations force him/her.

6.4 MOTIVATION
6.4.1 The Concept of Motivation
The term motivation derived from the Latin word mover meaning “to move.” In the present context,
motivation represents “those psychological processes that cause arousal, direction, and persistence of
voluntary actions that are goal oriented. Managers need to understand these psychological processes if
they are to successfully guide employees toward accomplishing organizational objectives.
 Motivation is an internal force that energizes behavior, gives direction to behavior, and underlies the
tendency to persist. This definition of motivation recognizes that in order to achieve goals, individuals
must be sufficiently stimulated and energetic, must have a clear focus or end in mind, and must be
willing and able to commit their energy for a long enough period of time to realize their aim. Since the
leading function of management involves influencing others to work toward organizational goals,
motivation is an important aspect of that function.

Because motivation is an internal force, we cannot measure the motivation of others directly. Instead, we
typically infer whether or not other individuals are motivated by watching their behavior. As managers
analyze their workforces, they can always see some people who outperform others of equal skill. A closer
look might reveal instances in which a person with outstanding talents is consistently outperformed by
someone having lesser talents. Why? These latter employees appear willing to exert more effort, to try
harder, to accomplish their goals, often these hard workers are described by their bosses as “motivated
employees.” Motivated individuals work hard, persist and are goal oriented.
Motivators
Motivators are things, which induce an individual to perform. While motivation reflects wants, motivators
are the identified rewards, or incentives that sharpen the derive to satisfy these wants. They are also the
means by which conflicting needs may be reconciled or one need heightened so that it will be given
priority over another. A motivator is something that influences an individual‟s behavior. It makes a
difference in what a person will do.

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The Motivation Cycle
The starting point in this cycle is a need or a deficiency or a state of felt deprivation an individual
experiences at a particular time. This deficiency causes tension (physiological or psychological in
balance), which will be modified by one‟s culture and personality to cause certain wants leading
/motivating the individual to some kind of goal directed behavior. This leads to satisfaction and one cycle
of motivation will be completed.

The Motivation Process

1
Need deficiency

3 Need satisfaction Goal Directed behavior 2

From this we can understand that deficiency triggers a drive for need satisfaction, which causes an
individual to take a certain course of action that will alleviate a need and reduce a drive. The need for
food for example will result in hunger and hunger will drive or motivate the individual to take action
(eating food), which will achieve the goal. This goal attainment will restore the physiological or
psychological balance and reduce or cutoff the drive for food.

Motivation Vs Satisfaction
Motivation refers to the drive and effort to satisfy a want or a goal. Satisfaction refers to the contentment
experienced when a want is satisfied. In other words, motivation implies a drive toward an outcome, and
satisfaction is the outcome already experienced.

Satisfaction
Motivation Results

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Motivation and Performance
All too often, motivation and performance are assumed to be one and the same. This faulty assumption
can lead to poor managerial decisions. The following formula for performance helps put motivation into
proper perspective:
Performance = Ability x Motivation x Environmental conditions
Thus, we see motivation is a necessary but insufficient contributor to job performance. The multiplication
sign is used to emphasize how a weakness in one factor can negate the other. The above relationship
between performance and motivation clearly shows us that managers should hire individuals who have the
ability to do what is required. After that, the management challenge is providing environmental conditions
that nurture and support individual motivation to work toward organizational goals. Keeping other
variables constant, motivation and performance have neither positive nor negative relationship. As
motivation increases, job performance increases, reaches its maximum and the decreases.
Optimal/maximum
-------
Performance

* After the optimal

point

further motivation brings

about anxiety, tenseness,

fretfulness, and the

anxiety eventually

decreases performance.

Motivation

6.4.2 Theories of Motivation

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 6.4.2.1 Carrot and Stick Approach
This metaphor relates the use of rewards and penalties in order to induce desired human behavior. It
comes from the old story that to make a donkey move one must put a carrot in front of it and if it does not
move beat it with stick from behind.

Despite all the researches and theories of motivation that have come to the fore in recent years, reward
and punishment are still recognized/considered by strong motivators. For centuries, however, they were
too often thought of as the only forces that could motivate people.

Carrot - money in the form of pay or bonuses.

Stick – fear such as fear of loss of job, loss of income, reduction of bonuses demotion or some other
penalty.

Failures of carrot and stick approach

1. Carrot can be obtained by any member of the organization without differentiation in performance –
through such practices as salary increases and promotion by seniority, automatic “merit” increases, and
executive bonuses not based on individual manager performance. It is as simple as this: If a person put
a donkey in a pen full of carrots and then stood outside with a carrot, would the donkey be encouraged
to come out of the pen?
2. Stick in the form of fear is not the best kind of motivating factor. It often gives rise to defensive or
refectory behavior, such as union organization, poor quality work, executive indifference, failure of a
manager to take any risk in decision-making, or even dishonesty.

6.4.2.2 Money as a Motivator

Even if under the carrot and stick approach money as a sole motivator has been criticized, it is used as a
motivator (motivating factor) but not the only one. Money can be used as a motivator under the following
conditions.
- For people who have low-level standards of living and who badly need it for their life.
- When the amount is so significant that the organization uses it for competitive purposes.
- When the payment is so differentiated that even at equal position discriminatory payment is made for
people with different levels of performance.

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 6.4.2.3 Maslow’s Need Hierarchy
One of the most widely mentioned theories of motivation is the hierarchy of needs theory put forth by
psychologist Abraham Maslow. Maslow proposed that motivation is a function of needs, and he also
proposed that human needs are arranged hierarchically (in a form of hierarchy). The hierarchy of needs is
based on four premises:

1. Only an unsatisfied need can influence behavior; a satisfied need is not a motivator. What motivates a
person is what s/he does not have but not what s/he has.
2. A person‟s needs are arranged in a priority order of importance. Thus, the priorities (hierarchy) go
from the most basic needs to the most complex.
3. As the person‟s needs are met on one level, the person advances to the next level of needs. S/he will
focus on the first level need until it is minimally satisfied before moving to the next level.
4. If satisfaction is not maintained for a once-satisfied need, it will become a priority need again.

Based on the above premises, Maslow proposed that human needs form a five-level hierarchy.

1. Physiological Needs
These are the basic needs for sustaining human life itself, such as food, water, air, shelter, sleep, etc.
Maslow took the position that until these needs are satisfied to the degree necessary to maintain life, other
needs will not motivate people. In other words, As Maslow points out, a person lacking food, love and
esteem wants food more than he/she wants acceptance or prestige. These other needs would be
unimportant. In the working environment, management tries to satisfy these needs primarily through
salary and by eliminating threats to physical safety.

2. Safety /Security Needs

When physiological needs are satisfied, safety needs become a priority as a motivator. Safety needs
include freedom from fear and anxiety, job security, desires for retirement and insurance programs and so
on. As with physiological needs, management attempts to satisfy safety needs primarily through salary.

3. Social/ Love/ Affiliation Needs

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Once we feel reasonably safe and secure, we turn our attention to relationships with others in order to
fulfill our belongingness needs, which involve the desire to affiliate with and be accepted by others i.e. the
need for friendship, companionship, and a place in a group. Love needs include both giving and receiving.
These needs are met by frequent interaction with fellow workers and acceptance by others.

4. Esteem Needs
Esteem needs include the desire for both self-esteem (self respect) and public esteem, and recognition by
others. These needs take two different forms. First, we have a need for competency, confidence and
independence. We also want the prestige, status, recognition and appreciation that others bestow on us.
Satisfying esteem needs produces self-worth-pride, self-confidence, and true sense of importance; not
satisfying them produces feelings of inability and inadequacy- feeling of inferiority, weakness and
helplessness. Esteem needs can be met in an organization through recognition by peers and superiors of
the person‟s work, by acquiring organizational titles and by the accomplishment of work projects.

5. Self-Actualization/Realization Needs
Refers to the need for fulfillment, the desire to become what one is capable of becoming-to maximize
one‟s potential and to accomplish something. For the athlete, it may be breaking a world‟s record; for the
research scientist, it may be finding a cure for HIV/AIDS; and for the physical therapist, it may be the
satisfaction of helping a child walk or laugh for the first time. In other words, these needs differ greatly
from person to person.

Maslow‟s theory suggested that people must satisfy lower-level (physiological needs) before working
toward higher-level needs. Only when physiological, security, and social needs have been more or less
satisfied do people seek esteem. This theory also suggests that if a lower-level need is suddenly
reactivated, the individual will try to satisfy that need rather than higher-level needs.

Maslow‟s hierarchy, although intuitively appealing and frequently used in management training, has not
found widespread support from management researchers. Beyond the first two basic needs, people vary in
their need emphasis. Some may seek social-need satisfaction, while others may emphasize esteem needs
or self-actualization needs. Thus, each individual may respond differently to organizational
characteristics. Moreover, the steps in Maslow‟s hierarchy may not be necessarily experienced in a

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sequential manner. People may have more than one need at the same time. Situations detect which needs
are most important at a given point in time.

6.4.2.4 Herzberg’s Two Factor Theory

Herzberg developed a theory known as the two-factor theory of motivation. The initial framework for
the two-factor was derived from interviews with accountants and engineers using what is known as
the critical-incident method. The accountants and engineers were asked to provide interviewers with
examples of time they felt exceptionally good or exceptionally bad about their jobs or job related
issues that made them feel good or bad.

According to the analysis, although an unpleasant work environment might be a reason given for job
dissatisfaction, a pleasant work environment is rarely cited as a reason for job satisfaction. This
suggested that job satisfaction and job dissatisfaction are not simple opposites. Traditionally,
managers viewed job satisfaction and job dissatisfaction as opposite ends. In contrast, Herzberg's
findings suggested the opposite of satisfaction is not dissatisfaction, but rather „no satisfaction‟.
Herzberg believed that two entirely separate sets of factors contribute to an employee‟s behavior at
work.

Herzberg labeled the factors that produced job satisfaction as motivators. His analysis indicated
these factors are directly related to job content. The absence of motivational factors may not result in
dissatisfaction, but their presence is likely to motivate employees to excel. When motivators are
absent, workers are neutral toward work, but when motivators are present, workers are highly
motivated and satisfied. Herzberg labeled the factors that led to job dissatisfaction as hygienes and
found they are related more to the work setting, or job context, than to job content. These factors do
not necessarily motivate employees to excel, but their absence may be a potential source of
dissatisfaction, low morale, and high turnover. When hygiene factors are poor, work is dissatisfying.
However, good hygiene factors simply remove the dissatisfaction; they do not by themselves cause
people to become highly satisfied and motivated in their work.

Herzberg's Motivators and Hygiene's

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 Motivators Leading to Job Hygienes Leading to
satisfaction Dissatisfaction

• Achievement • Policies and administration

• Recognition • Supervision
• Work it self • Relations with peers

• Responsibility • Working Condition

• Advancement • Pay
• Personal growth • Job Security

Thus, to the degree that motivators are present in a job, satisfaction will occur, when absent,
motivators do not lead to dissatisfaction. And, to the degree that hygienes are absent from a job,
dissatisfaction will occur, when present hygienes prevent dissatisfaction but do not lead to
satisfaction.

6.5 Communication in Organizations

Communication is the process of transmitting information among two or more people. It is the glue that
holds organizations together. Communication assists organizational member to accomplish both
individual and organizational goals, implement and respond to organizational change, coordinate
organizational activities, and engage in virtually all organizational relevant behaviors. It would be
extremely difficult to find an aspect of a manager's job that does not involve communication. In other
words communication is unavoidable in an organization's functioning. By its very nature a manager's job
requires communication. The success of every manager and every organization depends on
communication because in any undertaking involving two or more persons, it is essential for the
coordination of individual activities.

Formal and Informal Communications

Formal communication
This is a communication, which is intentionally designed by the organization. Information flows
through the formally established channel and is concerned with work related matters. Formal
communication includes; Downward communications, Upward communication, Horizontal
communication, and Diagonal communication.

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Vertical communication is communication that involves a message exchange between two or more levels
of the organization hierarchy. Vertical communication can involve a manager and a subordinate or can
involve several layers of the hierarchy. It includes downward and upward communications.

Downward communication occurs when information is transmitted from higher to lower levels in an
organization. Downward communication starts with top management and flows down through the
management levels to line workers and non-supervisory personnel. The major purposes of downward
communication are to provide organization members with information about organizational goals and
policies. The kinds of media used for downward communication include instructions, speeches, meetings,
the telephone, grapevine, memoranda, letters, handbooks, pamphlets, policy statements, procedures, etc.

Upward communication – in such situations, the communicator is at a lower level in the organization
than the receiver. In other words, information flows from the subordinates to the superior. The main
function of upward communication is to supply information to the upper levels about what is happening at
lower levels. It includes the flow of opinions, ideas, complaints, progress reports, suggestions,
explanations, and requests for aid or decisions and other kinds of information from subordinates up to
managers. Typical means for upward communication besides the chain of command are suggestion
systems, appeal and grievance procedures, complaint systems, counseling sessions, group meetings, etc.

Horizontal communication is lateral message exchange either within work unit boundaries, involving
peers who report to the same supervisor, or across work unit boundaries, involving individuals who report
to different supervisors. It takes place among departments or people on the same level of hierarchy. It is
useful to coordinate activities. Horizontal communication can take many forms, including meetings,
reports, memos, telephone conversations, and face-to-face discussions between individuals.

Diagonal communication involves the flow of information among departments or individuals on

different levels of the hierarchy. This occurs often in the case of line and staff departments, in which the
staff has functional authority. It is also common to find diagonal communication among line departments,
again in which one of them has functional authority. The use of diagonal channel would minimize the
time and effort expended by the organization (upward and then horizontal).

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 Vertical communication (downward)

Horizontal communication
Vertical communication (upward)
Diagonal communication

Informal Communication
It is a communication, which is not deliberately designed by the organization. It is rather created by
informal groups in order to satisfy their need to interact and share information among themselves. In the
informal communication, information flows in unstructured and unpredictable ways. In other words, it
is a structure less network. Informal communication channel is commonly termed as grapevine because
of its structure less direction of flow. Normally the information which flow in grave vine is considered
to be secret or confidential.

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