CHAPTER 7

THE DIRECTING / LEADING FUNCTION

1. MEANING AND THE NEED FOR LEADERSHIP

MEANING:

Leadership can be defined in different ways according to different writers. Some are:
1. 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.

2. 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.

3. 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.

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

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.

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 versus Management

Management is a broad subject that encompasses activities such as planning, organizing, staffing, directing, and controlling. Leadership,
on the other hand, focuses almost exclusively on the ‘people’ aspects of getting a job done-inspiring, motivating, directing, and gaining
commitment to organizational activities and goals. Leadership accompanies and complements the management functions. In short,
management influences brain, while leadership encourages the heart and the spirit.

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. The effectiveness and efficiency of leaders is nothing but to create conducive environment in the organization. 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 to induce or influence the beliefs or actions of other
CHAPTER 7: LEADING/DIRECTING 1
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). 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 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.

CHAPTER 7: LEADING/DIRECTING 2
 Types of outcome
Source of Leader Basis for power Commitment Compliance Resistance
influences
Referent power Admiration and liking Likely* Possible Possible
by others. If request is believed to If request is perceived to If request is
be important to leader be unimportant to leader something that will
harm leader
Expert power Possession of valued Likely* Possible Possible
expertise If request is persuasive If request is persuasive If leader is arrogant
and subordinates share but subordinates are and insulting or
leader’s task goals apathetic about task goal subordinates oppose
task goals
Legitimate power Hierarchical position Possible Likely* Possible
and authority If request is polite and If request or order is seen If arrogant demands
very appropriate as legitimate are made or request
does not appear
proper
Reward power Capacity to provide Possible Likely* Possible
valued rewards If used in a subtle, very If used in a mechanical, If used in a
personal way impersonal way manipulative,
arrogant way
Coercive power Ability to punish Very unlikely Possible Likely*
If used in a helpful, non If used in a hostile or
punitive way 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 1. It is personal-it exists because
when the incumbent leaves. of the 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 power types can be delegated
by superiors. (Expert and referent).

2. 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, 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-

CHAPTER 7: LEADING/DIRECTING 3
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.
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.
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).

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.

CHAPTER 7: LEADING/DIRECTING 4
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:
 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:
o The average human being does not inherently dislike work; the physical and mental effort involved is as natural as play or rest.
o 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.
o People generally become committed to organizational objectives if they are rewarded for doing so.
o The average human being learns, under proper conditions, not only to accept, but also they seek responsibility.
o Many people have a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems.
o 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 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.

3. LEADERSHIP STYLES
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 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

CHAPTER 7: LEADING/DIRECTING 5
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.
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

4. Situational Leadership style

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

4. MOTIVATION
The Concept of Motivation
The term motivation derived from the Latin word movere 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
CHAPTER 7: LEADING/DIRECTING 6
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.

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 2 Goal Directed behavior

satisfaction

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.

Motivation Results Satisfaction

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
Performance

increases, reaches its maximum and the decreases.

Optimal/maximum
-------
* After the optimal point
further motivation brings
about anxiety, tenseness,
fretfulness, and the
CHAPTER 7: LEADING/DIRECTING 7
 anxiety eventually
decreases performance.

Motivation

Theories of Motivation
A. 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.

B. 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.

C. 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.

CHAPTER 7: LEADING/DIRECTING 8
 3. Social/ Love/ Affiliation Needs
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 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.

D. 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

Motivators Leading to Job satisfaction Hygienes Leading to Dissatisfaction
• Achievement • Policies and administration
• Recognition • Supervision
• Work it self • Relations with peers
• Responsibility • Working Condition

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 • 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.

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.

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).

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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