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Dr. Rensis Likert

An American Educator &

Organizational Psychologist.

Best known for Research

on Management Styles &

for producing a surveyscale known as the Likert

Scale.

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In the 1960s, Likert outlined 4 systems of management

to describe the relationship, involvement, and roles of

managers and subordinates in industrial settings.

He based the systems on studies of highly productive

supervisors and their team members of an American

Insurance Company.

Central Aspects of Likert Theories

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System I System II

System III System IV

Exploitative/Authoritative

Benevolent/Authoritative

Consultative Participative

Likerts Management Systems

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Characteristics System 1 System 2 System 3 System 4

Trust No trust Master-servant

relationship i.e

always cautious

Substantial but

not complete

trust

Complete trust

Motivation Fear, threats &

punishment

Rewards &

punishment

Rewards,

punishment &some

involvement

Goals based on

participation &improvement

Interaction Little

interaction

Little interaction, Moderate

interaction

Extensive

interaction,

friendly

Responsibility Only at higher

level

Till managerial level More at higher

level then

lower level

At all level

Likerts Management Systems

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Characteristics System 1 System 2 System 3 System 4

Decision making Top level

decision making

& control

Top level

decision making

& control

Decision making

& control are at

primary level

but employees

are consulted &

their views

considered

Every employee

have decision

making power

Communication Downward and

inaccuratecommunication

Limited

communication

Both

communicationup & down

Extensive

vertical &horizontal

communication

Team work No Relatively little Moderate High

Likerts Management Systems

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End results System 1, 2 System 4

Employee loyalty Less Great

Performance goals Low High

Conflict More Less

Cooperation Less Great

Technical assistance to peer Less More

Feeling of unreasonable pressure High Low

Employees attitude towards

managers

Less favorable More

favorable

Motivation Lower Higher

Sales volume Lower Higher

Cost of sales Higher Lower

Quality of business sold Lower Higher

Likerts Management Systems - End Results

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Able to quantify the results of the work done in thefield ofGroup dynamics.

Helped in measurement of the soft areas ofmanagement , such as trust & communication.

Eg. An American company, Weldom which adoptedLikerts ideas, showed dramatic improvements in

terms of increased profits and productivity andlower rates of labor turnover, two years afterchanging from System 2 to System 4.

Advantages of Likerts System

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The nearer the behavioral characteristicsof an organization approach system 4,themore likely this will lead to

Long-term improvement in staffturnover i.e. more loyalty

High productivity

Low scrap

Low costsHigher motivation

High earnings & more profits

The organization will achieve optimum

effectiveness .

Conclusion

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Thank you