Module - 6

Principles or guides for leading

 Principle of harmony of objectives
 The principle of motivation
 The Principle of leadership
 Principle of maximum clarity in the communication
 Principle of communication integrity.
communication:
It is the process of passing information and understanding one
person to another.
It is a two way process. i.e exchange of information between 2
or more person.
 Sender & receiver are terminals
 Encoder : translates the human thought into a language.
 Medium : Through which a sender send message to receiver.
 Decoder : Translates the message into an interpretable form.
A manager to be successful must develop an effective system
of communication. So that he may issue instructions receive the
reaction of subordinates and to guide and motivate them.
Importance of communication

 Encourage decision making

 It creates interpersonal relations.
 It is a means of achieving coordination.
 It boost the morale of employees.
 It helps to create a better human relations.
 It improves public relations.
 Types of communication
 Formal communication
Formal communication is used for official purpose. It is used for
passing information or getting work done. It can be written or oral. It may be
either vertical or horizontal communication.
• Vertical communication:
It involves downward & upward communication .
Downward communication means the flow of communication from the top
level to lower level of employees – Warning
Upward communication means the flow of communication from workers to
higher management level giving work accomplishment report or other feed
back information – suggestions, opinions, complaints.
• Horizontal communication
Communication between positions of the same level. i.e. interdepartmental
communication, permits exchange of jobs, related experience and knowledge.
 Informal communication:
Any communication other than formal communication – unofficial.
 Barriers of communication
 Effective communication is the process of successful
transmission of the message from the sender to the receiver.
The receiver must understand what the sender wants to convey
and accordingly must give his valuable feedback or simply
respond. If any of the participants whether the sender or the
receiver is not clear about the content of the conversation, the
communication is said to be ineffective.
 Linguistic differences
 Environment
 Channel
 Lack of planning
 Motivation:
 Motivation means inspiring the subordinates to do the work for the
accomplishment of organizational objectives.
 A manager can get the desired result from the people working in the
organizations by providing them with proper stimulation or
motivation
 For making the organizational behavior desirable to the
organization, a manager should have to motivate their employees.
 A manager can motivate his employees by:
Financial : Incentives, bonus, gifts, etc.
Non Financial :Appreciation, promotion, etc.

Motivation differs from one to another depending on needs.

Management cant satisfy all of these needs but management must
have to satisfy some of the needs such as salary, good working
conditions etc.
 Factors affecting motivation
 Bonus and incentives
 Leadership role at workplace
 Recognition
 Achievement
 Possibilities of growth
 Work itself
 Responsibility
 Kinds of motivation
 Positive motivation:
Positive motivation means encouraging or prompting the workers by
providing them facilities or by giving some prize so that he may do
good work or more work than he was done previously and with less
supervision.

 Negative motivation:-
In this type , labour is prompted to work by threatening or by giving
punishment.

There are two kinds of negative motivation:-

Financial :- a cut is made in the wage of labour.
Non Financial :- by giving less facility such as reduction
in leave etc.
Leadership Behavior and styles
 There are several theories on leadership behavior and
styles. This section focuses on:
1. Leadership based on the use of authority
2. The managerial grid

Leadership style based on the use of authority

There are three basic styles based on use of authority:

 Autocratic leadership
 Democratic leadership
 Free rein leadership
 Types of leadership
 Autocratic leadership:
The leader has the supreme authority in decision making. Leader
makes a decision and announces it. The subordinates do not have any
participation in the decision making process. Subordinates are forced to obey
him.

Strength

No delay in the process of decision making

Responsibility can be easily fixed.

Weakness

It creates low morale and less confidence in subordinates

Ideas and capabilities of subordinates are not fully utilized.
 Democratic leadership:
The subordinates will also have participation in the decision
making process. A democratic leader promotes participation of
subordinates and develops strong team work.

Strength

It creates job satisfaction and increase the morale of subordinates

It helps to develop positive attitude in subordinates.

Weakness

Participative style is time consuming and delay decision making.

It requires proper communication between subordinates and
superiors.
 Free rein leadership:
Complete freedom is given to the subordinates. Superior
frames the policy and gives full freedom to subordinates to
implement it. This can be useful in businesses where creative
ideas are important.

Strength

Full utilization of the capacity of subordinate

It creates job satisfaction and increase the morale of
subordinate.

Weakness

Under this style, there is no leadership at all.

Subordinate does not get guidance and support from the leader.
 The Managerial Grid
 The managerial grid was developed by Robert Blake and Jane
mouton.
 Various managerial styles are described through managerial
grid.
 The grid has two dimensions viz., Concern for people and
concern for production
 Concern for production means the attitudes of a manager
towards a wide variety of things such as procedures and
processes, efficiency of work and volume of output.
 Concern for people includes such elements as creating good
working conditions and building up and maintaining
satisfactory inter personal relations.
 The horizontal axis in the grid represents concern for
production whereas the vertical axis represents concern for
people.
The managerial grid identifies five leadership styles & are discussed below:-

 Impoverished style:
This style located at the lower left hand corner of the grid cell (1,1) is
characterised by low concern for both people and production.

 Authoritarian style:
This style located at the lower right hand corner of the grid cell (9,1) is
identified by high concern for production and low concern for people.

 Country club style:

This style located at the upper left hand corner of the grid cell(1,9) is
identified by low concern for production and high concern for people.

 Team manager style:

This style located at the upper right hand corner of the grid cell (9,9) is
identified by high concern for both production and people.

 Middle of the road style:

This style located at the middle of the grid cell (5,5) maintains a balance
between workers need and organisations productivity goals.
Advantages of Managerial grid
 Managerial grid is very useful in identifying and
classifying managerial styles.
 Managerial grid it can be used as an instrument of
organisational development through training programs,
conference and the like.
 It has been used successfully in improving the attitudes
and behaviour of people throughout an organisation.
Disadvantages of Managerial Grid

 Managerial grid does not include why a managers style

falls in one or other part of the grid.
 There are more dimensions of leadership that can be
relevant.
 The model basically neglects the significance of the
internal and external constraints, context , circumstances
and situation.
 Trait approach to leadership
 Traits are the distinguishing personal characteristics of an
individual.
 Trait approach is also called genetic approach as it
assumes that leaders are born and not made.
 This approach is based on the assumption that great
leaders possess certain inborn qualities and characteristics
that differentiate them from their followers.
 Trait approach is also called as great person theory.
 This theory also maintains that people behave in a
particular way because of the differentiated by a universal
set of traits and characteristics.
 5 physical traits such as ( energy, appearance , height)
 4 intelligence and ability traits.
 16 personality traits such as ( adaptability,
aggressiveness).
 6 task related characteristics such as ( achievement
drive, initiative)
 9 social characteristics such as ( cooperativeness,
interpersonal skills)
 Contingency or situational
approaches to leadership
 After extensive research on the trait and behavioural
aspects of leadership, several researchers have come to the
view that no one trait or style is common for effective to
all situations.
 An ideal leader studies the overall prevailing situation ,
draws conclusions about the whole situation and adopts
the leadership style which is most appropriate to the
prevailing situation.
 Fiedlers contingency theory of leadership
 He developed a situational model of leadership which is termed as
contingency theory of leadership.
 This model states that people become efficient leaders not only because of
the attributes of their personalities but also because of various situational
factors and the interaction between leaders and group members.
 Fiedler lists three variables or factors which determine which style of
leadership that will be most effective.

 Position power : strong (favourable)

weak ( unfavourable)
 Task structure : clear (favourable)
not clear ( unfavourable)

 Leader member relations : good (favourable)

bad ( unfavourable)

 These are the two situations i.e favourable and unfavourable which is given
above.
 Transactional leadership
 Transactional leadership is viewed as a traditional form of
leadership
 It is primarily focuses on the accomplishment of predetermined
performance goals.
 Transactional leaders guide followers in the direction of
established goals by clarifying role and task requirements .
 A transactional leader focuses more on a series of transactions.
 Transactional leadership style is based on the concept that a
leader has to give something to his followers in exchange for
performing their tasks.
 In this style a leader may offer something valuable like
increased salary, incentives and promotion to his subordinates.
 Transformational Leadership
 A transformational leader is a person who stimulates and
inspires followers to achieve outcomes.
 In this style, the leader works to bring about change in the
organisation by implementing new ideas.
 Transformational leadership is defined as a leadership
approach that causes change in individuals.
 Transformational leader uses his influencing power and
enthusiasm to motivate his followers to work for the
benefit of the organisation.
Difference between transactional and transformational
leadership
 Transactional leadership is a type of leadership where by
rewards and punishments are used as a basis for initiating
the followers.
 Transformational leadership inspires and motivates his
followers for the achievement of organisational goals.
 Transactional leadership works for improving the present
conditions of the organisation.
 Transformational leadership works for changing the
present conditions of the organisations.
 Transactional leadership focuses on planning and
execution.
 Transformational leadership which focuses on innovation.
 Controlling
 Controlling in an organisation can be defined as process of
setting standards, measuring actual performance and
taking corrective actions.
 It is the process that measures current performance and
guides it towards the predetermined objectives.
 The importance of control has considerably increased now
a days due to several reasons.
 The managers have to maintain and continuously improve
the efficiency of operations.
 For this purpose regular checking of the work done is
required. This may also help in minimizing the cost.
Importance of controlling function
 Basis for future action
 Facilitates decision making
 Ensuring standards
 Facilitates decentralization
 Ensuring standards
 Ensuring utilization of resources
 Facilitates coordination
 Helps in improving efficiency
 Improving quality
 Responding to the environmental changes
 Competitive advantage.
 Basic controlling functions/
Process
 The basic control process, wherever it is found and
whatever is being controlled involve the followings steps.
 Establishment of standards
 Measuring actual performance
 Comparing actual performance against the standards
 Taking corrective actions.
Establishment of standards
The first step in the process of controlling is
concerned with setting performance standards.
These standards are the basis for measuring the actual
performance.
Thus, standards act as a lighthouse that warns &
guides the ships at sea.
Standards are the benchmarks towards which efforts
of entire organization are directed.
These standards can be expressed both in quantitative
and qualitative terms.
Measurement of actual performance.
 Once the standards have been determined, the next step is to
measure the actual performance.
 The various techniques for measuring are sample checking,
performance reports, personal observation etc.
 However, in order to facilitate easy comparison, the
performance should be measured on same basis that the
standards have.

Comparing actual performance against the standards.

 This step involves comparing the actual performance with
standards laid down in order to find the deviations.
 For example, performance of a salesman in terms of unit sold
in a week can be easily measured against the standard output
for the week.
Taking corrective actions.
 The last step in the process of controlling involves taking
corrective action. If the deviations are within acceptable
limits, no corrective measure is required. However, if the
deviations exceed acceptable limits, they should be
immediately brought to the notice of the management for
taking corrective measures, especially in the important
areas.
 Benchmarking
 Bench marking is a process of comparing and measuring
ones own business process with those of business leaders
anywhere in the world with a view to gaining information
and understanding of their methods and process, and
adopting it in the own organisation for improving
performance to a higher level.
 Simply stated benchmarking is the comparison of a given
function across companies.
 It is designed to allow managers to understand how their
functional performance compared with that of other
companies, particularly those that excel in that function
and to identify why their performance differs.
 Types of control
 Depending on the time at which control is applied,
controls are of three types:-
 Feed forward control
 Concurrent control
 Feedback control
Feed forward controls:-
 Feed forward controls, sometimes called preliminary or preventive
controls, attempt to identify and prevent deviations in the standards
before they occur.
 When managers implement control even before the actual activity
begins.
 It is also known as input control or steering control.
 The main aim of fee forward control is to solve the problem before
they occur.
 Feed forward controls focus on human resources , material resources
, and financial resources within the organization.
 These controls are evident in the selection and hiring of new
employees.
 For example, organizations attempt to improve the likelihood that
employees will perform up to standards by identifying the necessary
job skills and by using tests and other screening devices to hire
people with those skills.
concurrent control:-
 Concurrent controls monitor ongoing employee activity to
ensure consistency with quality standards.
 These controls rely on performance standards, rules, and
regulations for guiding employee tasks and behaviors.
 Their purpose is to ensure that work activities produce the
desired results.
 It is exercised when the work activity is in progress.
 It is also called real time control or process control.
 This control concentrates primarily on the present situation.
 When the performance standards are not met, managers or any
other authorized person can stop the work activity in progress
and can take the necessary corrective action.
 The aim of this control is to solve the problem even while it
occurs.
Feedback control:-

 Feedback controls involve reviewing information to

determine whether performance meets established standards.
 When control is exercised in the results (outcome) of the work
activity it is called as feedback control.
 It is also called output control, corrective control or post action
control.
 For example, suppose that an organization establishes a goal of
increasing its profit by 12 percent next year. To ensure that this
goal is reached, the organization must monitor its profit on a
monthly basis. After three months, if profit has increased by 3
percent, management might assume that plans are going
according to schedule.

 Principles of controlling
 Principle of purpose of control
 Principle of future directed controls
 Principle of control responsibility
 Principle of efficiency of controls
 Principle of preventive control
 Principle of reflection of plans
 Principle of individuality of controls
 Principles of organizational stability
 Principles of standards
 Principles of exception
 Principle of critical point of control
 Principle of flexible controls
 Principle of action
Requirements for effective control
 Tailoring controls to plans and positions
 Tailoring controls to individual managers
 Making sure the control point up expectation at critical
point
 Objectivity of control
 Economical of controls
 Flexibility of controls
 Fitting the system of control to the organization culture.
 Control should lead to corrective actions.
 Controlling Techniques
 Since there is no universally accepted control system for
organization, it becomes essential for each organization to
develop a control system that suits the situation and areas.
 The important control techniques used in by the managers
are described in the following sections.
 Reasons for resistance to control
 Excessive control
 Tendency to avoid accountability
 Rewards of employees participation in the control process
 Inconsistent focus
Controls of overall performance
 Overall planning is applied to the enterprises or major
division goals. So controls must also be applied.
 Decentralization creates semi autonomous units which
must be subjected to overall controls to avoid complete
autonomy.
 Overall control enables the measurement of integrated
area managers total effort rather than part of it.
 Global controlling
 Controlling posses special challenges if a company
engages in multinational business.
 Factors like distance, culture, language and practices
create barriers to effective control.
 Meetings reporting and inspections are typically part of
the international control system.
 Global managers have to understand the culture of the
place in which they are operating to make their managerial
actions successful.
 A comparison of controlling practices of Japanese,
American and Chinese follows:
 In Japan, managers are a part of the work group rather
than being separated from employees.
 The measurement of individual performance is not against
specific verifiable objectives, instead, emphasis is placed
on group performance.
 The Japanese are well known for their concern for quality.
 They could successfully produce quality products because
they exercises effective quality control programs and
actively participate in Quality circle.
 Quality Circle
 Quality circle can be defined as a small group of
employees of the same work area, doing similar work that
meets voluntarily and regularly to identify, analyze and
resolve work related problems.
 Members of quality circles are allowed to meet
periodically.
 Quality circles help to build mutual trust and greater
understanding between management and the workers.
Characteristics of quality circle
 QC is form of participative management
 QC is a human resource development technique
 The basic role of QC is to identify and solve work
related problems for improving quality and
productivity.
 The memberships of quality circles are voluntary and
are led by a supervisor.
 The members meet regularly or according to an agreed
schedule.
 Objectives of quality circle
 To improve the quality and productivity and thus
contribute to the improvements and developments of the
enterprise.
 To reduce the cost of products or services by waste
reduction, safety, effective utilization of resources,
avoiding unnecessary errors and defects.
 To identify and work related problems that interferences
with the production.
 To improve communication within the organization
 To increase employees loyalty and commitment in the
organization and its goals.
 Total Quality Management
 One popular approach to improving quality is called Total
Quality Management(TQM).
 TQM is defined in ISO 8402 as the “Management approach of
an organization, centered on quality, based on the participation
of all its members and aiming at long term success through
customer satisfaction and benefits to all members of the
organization and society”.
 TQM approach focuses on the quality of processes that are
carried out in the organization producing and delivering the
goods or services to the customer satisfaction.
 TQM approach is customer oriented where as conventional
quality management is product oriented.
 Objectives of TQM
 Meeting the customer requirements
 Quality improvement at every level
 TQM aims at prevention of defects rather than rectifying
them once they have occurred.
 Steps in implementing TQM
 The company reviews the needs of its customers
 The company plans the activities needed to meet these
customer needs
 The company establishes and stabilizes the process
required to deliver the products and services needed by the
customer.
 The company implements systems to further improve its
processes, products and services.
 Principles of TQM
 Constancy of purpose
 Adopt the new philosophy
 Don't rely on mass inspection
 Don’t award business on price
 Constant improvement
 Training
 Leadership
 Drive out fear
 Break down barriers between departments
 Education and self improvement
 Put everybody in the company to accomplish the
transformation
 Barriers to TQM implementation
 Non committed management
 Difficulty in changing organization culture
 Improper planning
 Insufficient training and education
 Improper organization structure
 Difficulty in accessing data/results
 Lack of properly understanding customers.
 Advantages of TQM
 Improvement in product quality, product design and
product service.
 Improvement in market place acceptance
 It makes the company a leader not a follower.
 Customers are benefited by having fewer problems with
the product, good customer care, etc.
 Company is benefited by better quality product at reduced
cost, good productivity, improved profitability, reduced
quality costs etc.
 Disadvantages of TQM
 Time needed for implementing TQM is lengthy.
 Initial cost is more as it involves training of workers,
interrupting work.
 Benefits may not be seen for several years.
 Workers may feel resistant to change and they will feel
insecure about their job.