notes of management concepts

1 MANAGEMENT CONCEPTS

Teacher’s name: Sir Farrukh Usman

Book recommended: Robbins 7th edition

Lectures compiled by: Muhammad irfan Malik

(FUUAST gulshan campus)

Who is a manager?

A manager is someone who works with and through other people to coordinate work activities to achieve the organizational objectives.

Define management

Such a process that is used to attain the objectives of an organization by efficient and effective planning, organizing, leading and controlling its human, physical, informational and financial resources.

Define the terms which are underlined in the definition of management

Objectives: objectives are the desired outcomes

Efficient: getting the most output from the least amount of input

Effective: performing activities that help in achieving the organizational goals

Planning: the process of determining objectives, establishing an overall strategy to achieve the objectives and creating a set of plans to coordinate organizational work.

Organizing: the process of determining what tasks to be done, who is to do them and where the decisions are made

Leading: process of motivating people to achieve objectives, hiring, selecting, promoting and firing the employees.

PREPARED BY: MUHAMMAD IRFAN MALIK MBA FEDERAL URDU UNIVERSITY


Controlling: it is the process of monitoring actual performance, comparing actual with the standard and taking corrective action in case of significant deviations.

What is an organization?

An organization is a group of people in which the arrangement is deliberate to achieve a particular objective.

Management levels

There are three levels of management

Top, middle, low or first line managers

First line managers supervise the work activities of non managerial staff who are directly involved in the process of producing goods and services

Middle managers are product, line, divisional and branch their work is to supervise first line managers.



Top management takes organizational and major decisions that effect the whole organization i.e. which business to enter, product launch and deals with the competition.

Management roles

A manager performs the following three roles

Interpersonal roles: Involve people and other duties that are symbolic.

Figurehead: manager is a symbolic head of the org.

Liaison: to maintain contacts between insiders and outsiders and within the organization department.

Leader: motivate employees, selects, hire promote and fire them

Informational roles: Involves receiving, collecting and disseminating information

Monitor: receives information observe and monitor the information

Disseminator: information delivering to the members of organization and partners

Spokesperson: providing information to outsiders

Decisional roles: revolves around decision making

Entrepreneur: analyze environment, select opportunity and avail the opportunity.

Resource allocator: allocates the human, physical, informational and financial resources of the organization.

Disturbance handler: competition handling, conflict handling among employees.

Negotiator: negotiate for sales purchase etc.



Management skills:

There are three types of skills

Technical skills:

The knowledge of or the proficiency in a particular field

Human skills

The ability to work well with the people both individually and in groups

Conceptual skills

The ability to think and conceptualize about complex and abstract (none existing) situation

System perspective

Different interrelated and interdependent parts working together to achieve a particular.

Open system: system that interacts with the environment, take input and sometimes output to produce goods

Close system

System that does nor interact or influenced by the environment

What is interdependency of the departments in the organization/



The organization departments are dependent on each other. If the production department is very efficient but the marketing department is not competent to properly market the products and does not support the production department the organization will suffer in this scenario.

Contingency perspective

A view that says the organizations are different and face different situations therefore they require different ways of management.

Universality of management

A view that says management is required in all types of organizations, all sizes of organization, in all organizational areas and at all levels of organization

Management theories

Scientific management

General administrative approach

Quantitative approach

Human behavior approach

Scientific management

Principles of scientific management

Develop a science for each element of the work

Scientifically select and train workers

Heartily cooperate with the subordinates

Divide work and responsibilities equally between worker and manager

Fredrick Taylor observed the workers for 20 years and find out the inefficiency that is why it is called the scientific management. Scientific selection means ability and job requirements should match and training means match ability and than train. Frenk



and Lillian captured the workers and decrease the work activities. Scientific management focuses on the efficiency of lower level

General administrative approach

Fayol’s 14 principles of management

Division of work: dividing a complete job into narrow and repetitive components.

Authority: rights inherent in a managerial position to tell people what to do and expect them to do that.

Unity of command: each employee should report to one superior there should be one boss for all subordinates.

Unity of direction: there should be a single plan of action

Subordination of individual interest to general interest: organizational objectives should be the priority then the interest of individual interest.

Equity: manager should be kind there should be no discriminations.

Initiative: where there is more load of work on employees.

Scalar chain;

Authority flow should be from top to bottom.

Order: people and equipment should be at right place at right time.

Discipline: obedience of rules

Stability of tenure of personnel: labor tenure should be stable; labor turnover rate should be low.

Centralization: in an organization where decisions are made by the top management is called centralization.

Remunerations: wages and payment should be fair.

Spirit de caught: team work



Max Weber

Bureaucracy: a form of organization characterized by division of labor, clearly defined hierarchy, detailed rules and regulations and impersonal relationship.

Hierarchy: flow of authority should be defined who is superior

Quantitative approach

Use of quantitative techniques to improve decision making, statistical and mathematical techniques are called quantitative techniques such as how much quantity should we order.

Decision making

Define the decision making

A choice from two of more alternatives to solve the problem

Steps in decision making

Identification of the problem: symptoms of the problem, when actual performance is measured with the standard, if there is deviation there is a problem. It shows symptoms. E.g. our sales are less than expected sales, It is a symptom we have to discus the cause of the problem, the causes may be:

a. Weak advertisement

b. Weak product quality

c. Tough competition

d. Price increase

Identification of the decision criteria: it tells when the decision is going to be taken. A decision criterion means what is relevant to the decision. E.g. for advertisement

Select the firm

What cost

What slogan



What timing (what should be the timing of ad)

Allocating weights to the criteria: every criterion is not important. We will give weights to the criteria. Make the list of the alternatives.

Developing the decision alternatives: make a list of the alternatives

Analysis of the alternatives: carefully analyze the alternatives

Analysis of the firms for selection of advertisement

Firms Cost Reliability Slogan Timing

A 7 2 4 1

B 3 8 5 1

C 8 7 3 1

Selection of an alternative: select the most appropriate alternative

Selection of the advertisement firms

Firms Cost Reliability Slogan Timing Total

A 35 20 16 4 75

B 15 80 20 4 119

C 40 70 12 4 126

Implementing an alternative : implement the alternative, make the decision,



Evaluating results: evaluate the results through controlling.

Pervasiveness of decision making

Decision making is involved in every managerial function. It is involved in planning, organizing, leading, controlling. Some experts say: managers are paid because they make decisions.

Rational decision making

To select the best alternative is rational decision making

Assumptions of rational decision making

The problem is cleared is unambiguous

A single well defined goal is to be achieved

All alternatives and consequences are known

Preferences are cleared

Preferences are constant and stable

No cost or time constraints exist

Final choice will maximize pay off

Bounded rationality

Behavior that is rational within the parameters of simplified decision making process which is limited or bounded by an individual’s ability to process information.

Intuitive decision making

A subconscious process of making decisions on the basis of experience and accumulated judgments

Types of problems and decisions



Problems:

Structured problems: clear, straight forward, familiar, simple and well defined problems

Unstructured problems: a problem that is not familiar and rarely faced by the organizations is called unstructured problem

Decisions:

Program decisions: a simple, straight approach to solve the problem.

Non program decision: decision that need to be defined for a specific problem.

Planning

The process of determining objectives, establishing an overall strategy to achieve the objectives and creating a set of plans to coordinate organizational work, At least four years of plans should be planed in advance. The two important things of planning are goal and plan. Goal is the desired outcome whereas plan is a document that outlines how goals are going to be achieved including resource allocation, scheduling necessary actions to achieve organizational goals.

Types of goals:

Stated: written in the chartered, MOA, financial statements.

Real: actually defined by the actions of the members.

Purpose of planning;

Gives directions: each member of the organization knows the rules and regulations and the goals are very clearly set

Reduce uncertainty: one can not prevent himself from the environment, planning identifies the changes in the environment and that expected change can be tackled.

Minimize wastage: in planning the wastage can be highlighted, planning minimizes the wastage of resources.

Set standards used in controlling: planning supports controlling.



Types of plans on the basis of strategic plans

Breadth

Strategic plans: plans that apply to the entire organization and seek to position the organization in terms of its environment.

Operational plans: plans that specify the details that how overall goals are to be achieved.

Time frame

Long term: the plans which are for three or more years are long term plans.

Short term: plans for one or less than one year.

Specifically

Specific: plans that leave no room for interpretation

Directional: plans that set out general guidelines for activities

Frequency of use

Single use: plans that are created to meet the needs of a unique situation

Standing use: plans that are used to guide the activities that are performed repeatedly, they look the whole organization.

Approaches to goal setting:

Traditional approach of planning: goals are set by the top management

Management by objective MBO: goals are jointly determined by subordinates and supervisors. Progress towards these goals periodically is assessed and rewards are allocated on the basis of this progress.

Four elements of MBO:

Participative decision making

Performance feedback



Goals specific

Explicit time period

Characteristics of well designed plan:

Measurable:

Goals should be measurable whither the marketing department could increase sales; production department could decrease the prices and enhanced the quality.

Written:

The goals and plan should be in black and white. Written plans are evidence and when you write you conceptualize more.

Challenging:

The plans should be challenging but achievable. Challenging goals motivate employees to achieve them.

Clear as to time frame:

The time should be clearly stated that in what period we want to achieve our goals if the time is not clear we can not measure the performance.

Communicated to all organization members:

The goals should be communicated to all organization members so that one can know that where we are and what we want to achieve.

Defined in terms of outcomes rather than actions:

Outcome is what we want to attain what to we want to get. The goals should state the outcomes rather actions.

Contingency factor in planning:

Organizational level:

Top level: specific plans



Low level: operational plans

Environment uncertainty:

Directional plans

Length of further commitment:

If length of work is high plan should be high

Criticism on planning:

Creates rigidity:

Planning locks the managers

Can not be done for dynamic environment:

Can not be planed for an environment because the environment changes so fast

Reduce creativity:

When the managers are rigid or locked creativity is reduced.

Strategic management

The set of decisions and actions that determine long run performance of an organization, strategy is an action taken in response to competitors.

Strategic management process

Analyze the current mission objectives and strategies

Analyze the objectives whether they are measurable or not review the strategies and mission statement

Analyzing the environment (external analysis)

Analyze the micro and macro environment

Identifying threats and opportunities



Space to enter in a market is opportunity, threats of future which the company may face in the long run.

Analyze the organizational resources and capabilities (internal analysis)

Analyze the human, physical, financial resources, after sales services activities may be our best capability

Identifying strengths and weaknesses

Strength/capabilities: any unique resource that organizations possess or activities that organizations perform well and better than others

Weakness: any resource that an organization needs but does not possess or activities do not performed well.

Formulating strategies

Design and make the strategies and plan

Implementing strategies

Implement the strategy in letter and spirit

Evaluating strategies:

Evaluate the results through controlling.

Components of a mission statement:

Market: which is the market to target?

Customers: who are the customers of the firm? Students, teachers, doctors

Product: which need of the customer to satisfy? What will be the product?

Technology: whether using the current technology or not?

Self concept: which is the competitive advantage of the firm?

Concerns for employees: providing benefits to employees

Concerns for public image: societal marketing, green marketing



Concerns for growth and stability: searching new market for growth and stability

Business strategies

a. Corporate level strategiesb. Business level strategiesc. Functional level strategies

Corporate level strategies:

A strategy that seeks to determine what business a company should be in or wants to be in

1. Stability: A strategy characterized by an absence of a significant change. Work force, marker share, production

2. Growth: a strategy in which an organization increase its operationsa. Direct expansion: growth can be achieved by different ways, new products

same market, same product new in this strategy firm wants to increase the sales in existing and new markets.

b. Vertical integration: control on suppler and distributor Backward integration : control on supplier or self suppler Forward integration : control on distributor or self distributor Horizontal integration : combining operations with competitors to reduce

threats and avoid competition.c. Diversification

Related diversification : diversifying the products related to the main products or business

Unrelated: diversifying the product which is not related to the main products of business

3. Defensive strategiesa. Retrenchment: downsizing or reduction or sales of assets b. Divestiture: selling of the SBU which is unprofitablec. Liquidation: selling complete organization



Business level strategies:

A strategy that determines how each SBU should compete in its industry.

Cost leadership: edge on the basis of cost, leader in the market, market leader.

Differentiation: product is significantly different of the competitor

Focus: in big market satisfy the smaller segment which is called niche marketing.

Five forces that determine the industry attractiveness by Michel porter

1. Threats of new entrants

Capital requirements, brand loyalty

2. Threats of substitute products

Switching cost (price, time, energy) brand loyalty

3. Bargaining power of customer

Numbers of customer, customer information availability or substitute

4. Bargaining power of suppler

Supplier concentrations, availability and substitute input

5. Existing rivalry among firms

Product differences, industry growth rate



What is competitive advantage?

Any thing that sets a firm apart from its competitors design, service, unique strength capability, unique resources, raw material, and technology may be the competitive advantage of the firm.

Organizing

The process of determining what tasks to be done, which is to do them and where the decisions are made

Organizational structure:

Formal framework through which jobs are divided, grouped and coordinated

Organization design:

When a manager is engaged in changing structure is called organization design.

Factors that affect the organizational design

Work specialization: each component of the work should be done by specialized individual

Departmentalization: the basis through which jobs are grouped together

a) Functional departmentalization : grouping of activities on the basis of functions performed i.e. marketing, sales, accounts, etc

b) Product departmentalization : grouping of activities on the basis of product linec) Customer departmentalization : grouping of activities on the basis of

customers. Customers can be segmented shoes companies can divide customers as male and female.

d) Process departmentalization : grouping of activities on the basis of customers and product flow.

e) Geographical departmentalization: departmentalization on the basis of territory i.e. Karachi branch, Lahore branch

Chain of command: the continuous line of authority that extends from top organizational level to lower and classify who reports to whom

a) Authority: rights inherent in a managerial position to tell people what to do and expect them to do so



b) Responsibility: the obligation to perform any assigned duty is called responsibility

c) Unity of command : each employee should report to only one superior, there should be one boss for a single department

Span of control: the number of employees a manager can effectively and efficiently manage is called span of control.

a) Training : trained employees require less supervisionb) Skill: if the worker is skilled the span will be wider c) Complexity of tasks : complex tasks require more supervisiond) Simplicity of tasks : simple tasks widen the spane) Sophistication of information system : if the information is not easily available

the employee will require more supervision f) Environment: stable environment wider span unstable environment narrow

span

Centralization and decentralization

The degree to which decision making in an organization is concentrated on a single point is celled centralization.

The degree to which lower level employees are involved in decision making or actually make the decisions is called decentralization

Formulization

The degree to which jobs within the organization are standardized at the extent to which employee behavior is guided by rules and procedures

Factors of centralization and decentralization

Environment: Stable environment centralization unstable decentralization

Nature of decision If the decision is significant it should be centralized

Skills of employeesUnskilled employees’ centralization, skilled employees’ decentralization

Size of the companyLarge size centralization, geographic decentralization

AutocraticCentralization



DemocraticDecentralization

Organizational design:

Mechanistic: formulation, centralization, cross action teams, chain of command, rigid, work specialization.

Organic: adoptive, not strict, jobs not highly standardized, departments are not rigid, decentralization.

Factors of organizational design:

Strategy: strategy is the means of achieving short term objectives in response to the competitor. There are three strategies:

Cost minimization, innovation, imitation.

Technology:

Routine technology; structure is mechanistic, non routine technology; organic.

Size:

As the size increases its mechanistic

Environmental uncertainty:

If environment is stable the design is mechanistic

Leadership

A person who has followers is leader, the difference between a leader and a manager is that the managers are appointed in contrast the leaders normally emerge within a group. Leading is to influence people it can perform beyond the actions. All the managers should be leader. Leader is someone who influences people and managerial authority leadership is the process of influencing people towards the achievement of a particular objective.

Characteristics of leadership

Trait theory:

Traits means the qualities or characteristics



Drive:

To exert high level of efforts, more needs of achievement and tireless efforts, initiative.

Desire to lead:

Strong desire to lead and assumed great responsibility

Honesty and integrity:

A leader should be truthful, consistent in words and deeds and there should be a relationship between leaders the followers.

Intelligence:

The processing capability of a leader should be very should have the quality of interpreting information

Self confidence:

Should be highly confident, the confidence will develop if the information or knowledge will be reliable.

Job relative knowledge:

Must posses the knowledge about the company, industry, and technology

Behavioral theories

University of Lowa state

Autocratic style: a leader who centralize authority, dictate work methods and limit employee participation

Democratic style: a leader who involves subordinates in decision making, delegates’ authority encourages participation in deciding work methods and goals.

Lazes fair: a leader who gives a group a complete freedom to make decision and complete the work in whatever way it saw fit. For example an assignment by the teacher

Ohio State



a. Initiating structure: the extent to which a leader was likely to define and structure his or her role and the roles of the followers in the search for goal attainment.

b. Consideration (friendly leader): the extent to which the leader has job relationships characterized by mutual trust and the group members ideas and feelings

University of Michigan study

Employee oriented leaders Production oriented leaders

Managerial Grid

Situational theories

The degree to which members have trust, respect and confidence in their leader

Fiedler contingency model

The Fiedler contingency model is a leadership theory of industrial and organizational psychology developed by Fred Fiedler (born 1922), one of the leading scientists who helped his field move from the research of traits and personal characteristics of leaders to leadership styles and behaviors.

Two factors

The first management style, Taylorists, assumed there was one best style of leadership. Fiedler’s contingency model postulates that the leader’s effectiveness is based on ‘situational contingency’ this is a result of interaction of two factors:



leadership style and situational favorableness (later called situational control). More than 400 studies have since investigated this relationship.

Least preferred co-worker (LPC)

The leadership style of the leader, thus, fixed and measured by what he calls the least preferred co-worker (LPC) scale, an instrument for measuring an individual’s leadership orientation. The LPC scale asks a leader to think of all the people with whom they have ever worked and then describe the person, with whom they have worked least well, using a series of bipolar scales of 1 to 8, such as the following:

Unfriendly 1 2 3 4 5 6 7 8 Friendly

Uncooperative 1 2 3 4 5 6 7 8 Cooperative

Hostile 1 2 3 4 5 6 7 8 Supportive

.... 1 2 3 4 5 6 7 8 ....

Guarded 1 2 3 4 5 6 7 8 Open

The responses to these scales (usually 18-25 in total) are summed and averaged: a high LPC score suggests that the leader has a human relations orientation, while a low LPC score indicates a task orientation. Fiedler assumes that everybody's least preferred coworker in fact is on average about equally unpleasant. But people who are indeed relationship motivated, tend to describe their least preferred coworkers in a more positive manner, e.g., more pleasant and more efficient. Therefore, they receive higher LPC scores. People who are task motivated, on the other hand, tend to rate their least preferred coworkers in a more negative manner. Therefore, they receive lower LPC scores. So, the Least Preferred Coworker (LPC) scale is actually not about the least preferred worker at all, instead, it is about the person who takes the test; it is about that person's motivation type. This is so, because, individuals who rate their least preferred coworker in relatively favorable light on these scales derive satisfaction out of interpersonal relationship, and those who rate the coworker in a relatively unfavorable light get satisfaction out of successful task performance. This method reveals an individual's emotional reaction to people they cannot work with. Critics point out that this is not always an accurate measurement of leadership effectiveness.

Situational favorableness

According to Fiedler, there is no ideal leader. Both low-LPC (task-oriented) and high-LPC (relationship-oriented) leaders can be effective if their leadership orientation fits



the situation. The contingency theory allows for predicting the characteristics of the appropriate situations for effectiveness. Three situational components determine the favorableness of situational control:

1. Leader-Member Relations, referring to the degree of mutual trust, respect and confidence between the leader and the subordinates.

2. Task Structure, referring to the extent to which group tasks are clear and structured.

3. Leader Position Power, referring to the power inherent in the leader's position itself.

When there is a good leader-member relation, a highly structured task, and high leader position power, the situation is considered a "favorable situation." Fiedler found that low-LPC leaders are more effective in extremely favorable or unfavorable situations, whereas high-LPC leaders perform best in situations with intermediate favorability.

Leader-situation match and mismatch

Since personality is relatively stable, the contingency model suggests that improving effectiveness requires changing the situation to fit the leader. This is called "job engineering." The organization or the leader may increase or decrease task structure and position power, also training and group development may improve leader-member relations. In his 1976 book Improving Leadership Effectiveness: the Leader Match Concept Fiedler (with Martin Chemers and Linda Maher) offers a self paced leadership training program designed to help leaders alter the favorableness of the situation, or situational control.

Examples

Task-oriented leadership would be advisable in natural disaster, like a flood or fire. In an uncertain situation the leader-member relations are usually poor, the task is unstructured, and the position power is weak. The one who emerges as a leader to direct the group's activity usually does not know subordinates personally. The task-oriented leader who gets things accomplished proves to be the most successful. If the leader is considerate (relationship-oriented), they may waste so much time in the disaster, that things get out of control and lives are lost.



Blue-collar workers generally want to know exactly what they are supposed to do. Therefore, their work environment is usually highly structured. The leader's position power is strong if management backs their decision. Finally, even though the leader may not be relationship-oriented, leader-member relations may be extremely strong if they can gain promotions and salary increases for subordinates. Under these situations the task-oriented style of leadership is preferred over the (considerate) relationship-oriented style.

The considerate (relationship-oriented) style of leadership can be appropriate in an environment where the situation is moderately favorable or certain. For example, when (1) leader-member relations are good, (2) the task is unstructured, and (3) position power is weak. Situations like this exist with research scientists, who do not like superiors to structure the task for them. They prefer to follow their own creative leads in order to solve problems. In a situation like this a considerate style of leadership is preferred over the task-oriented

Hersey and Blanchard's Situational Leadership

Assumptions

Leaders should adapt their style to follower development style (or 'maturity'), based on how ready and willing the follower is to perform required tasks (that is, their competence and motivation).

There are four leadership styles (S1 to S4) that match the development levels (D1 to D4) of the followers.

The four styles suggest that leaders should put greater or less focus on the task in question and/or the relationship between the leader and the follower, depending on the development level of the follower.

Style

Leadership style in response to follower development level

Follower development level

Low HighR4 R3 R2 R1Task / directive behavior



Low High

Relationship / supportivebehavior

High

Low

S3participating

S2Selling

S4Delegating

S1Telling

S1: Telling / Directing

Follower: R1: Low competence, low commitment / Unable and unwilling or insecure

Leader: High task focus, low relationship focus

When the follower cannot do the job and is unwilling or afraid to try, then the leader takes a highly directive role, telling them what to do but without a great deal of concern for the relationship. The leader may also provide a working structure, both for the job and in terms of how the person is controlled.

The leader may first find out why the person is not motivated and if there are any limitations in ability. These two factors may be linked, for example where a person believes they are less capable than they should be may be in some form of denial or other coping. They follower may also lack self-confidence as a result.

If the leader focused more on the relationship, the follower may become confused about what must be done and what is optional. The leader thus maintains a clear 'does this' position to ensure all required actions are clear.

S2: Selling / Coaching

Follower: R2: Some competence, variable commitment / Unable but willing or motivated

Leader: High task focus, high relationship focus


http://changingminds.org/explanations/behaviors/coping/coping.htm

http://changingminds.org/explanations/behaviors/coping/denial.htm


When the follower can do the job, at least to some extent, and perhaps is over-confident about their ability in this, then 'telling' them what to do may demotivate them or lead to resistance. The leader thus needs to 'sell' another way of working, explaining and clarifying decisions.

The leader thus spends time listening and advising and, where appropriate, helping the follower to gain necessary skills through coaching methods.

Note: S1 and S2 are leader-driven.

S3: Participating / Supporting

Follower: R3: High competence, variable commitment / Able but unwilling or insecure

Leader: Low task focus, high relationship focus

When the follower can do the job, but is refusing to do it or otherwise showing insufficient commitment, the leader need not worry about showing them what to do, and instead is concerned with finding out why the person is refusing and thence persuading them to cooperate.

There is less excuse here for followers to be reticent about their ability, and the key is very much around motivation. If the causes are found then they can be addressed by the leader. The leader thus spends time listening, praising and otherwise making the follower feel good when they show the necessary commitment.

S4: Delegating / Observing

Follower: R4: High competence, high commitment / Able and willing or motivated

Leader: Low task focus, low relationship focus

When the follower can do the job and is motivated to do it, then the leader can basically leave them to it, largely trusting them to get on with the job although they also may need to keep a relatively distant eye on things to ensure everything is going to plan.


http://changingminds.org/techniques/listening/listening.htm

http://changingminds.org/techniques/listening/listening.htm


Followers at this level have less need for support or frequent praise, although as with anyone, occasional recognition is always welcome.

Path-Goal Theory of Leadership

Description

The Path-Goal Theory of Leadership was developed to describe the way that leaders encourage and support their followers in achieving the goals they have been set by making the path that they should take clear and easy.

In particular, leaders:

Clarify the path so subordinates know which way to go. Remove roadblocks that are stopping them going there. Increasing the rewards along the route.

Leaders can take a strong or limited approach in these. In clarifying the path, they may be directive or give vague hints. In removing roadblocks, they may scour the path or help the follower move the bigger blocks. In increasing rewards, they may give occasional encouragement or pave the way with gold.

This variation in approach will depend on the situation, including the follower's capability and motivation, as well as the difficulty of the job and other contextual factors.

House and Mitchell (1974) describe four styles of leadership:

Supportive leadership

Considering the needs of the follower, showing concern for their welfare and creating a friendly working environment. This includes increasing the follower's self-esteem and making the job more interesting. This approach is best when the work is stressful, boring or hazardous.

Directive leadership

Telling followers what needs to be done and giving appropriate guidance along the way. This includes giving them schedules of specific work to be done at specific



times. Rewards may also be increased as needed and role ambiguity decreased (by telling them what they should be doing).

This may be used when the task is unstructured and complex and the follower is inexperienced. This increases the follower's sense of security and control and hence is appropriate to the situation.

Participative leadership

Consulting with followers and taking their ideas into account when making decisions and taking particular actions. This approach is best when the followers are expert and their advice is both needed and they expect to be able to give it.

Achievement-oriented leadership:

Setting challenging goals, both in work and in self-improvement (and often together). High standards are demonstrated and expected. The leader shows faith in the capabilities of the follower to succeed. This approach is best when the task is complex.

Contingency factors:

Environmental Work group Formal authority Task and structure

Follower’s personal trait

Locus of control Perceived ability Experience

Leadership power:

An essential part of leadership or management is to influence the people you

manage so that they do what you want them to do. The influence of a leader will

depend on a variety of factors including their personality and of those around them.



For the purposes of this article we will refer to the people that the leader is managing

or leading as followers. The influence of a leader over his followers is often referred

to as power. Below we will explore the different types of power a leader may have.

Reward Power

This type of influence is created when the leader is able to offer a reward to his

followers for completing tasks/behaving in a certain manner. Rewards in the

workplace can take a variety of forms from chocolates, gift vouchers and holidays to

promotions, commission and pay rises. This reward will only be effective if ;

Firstly - the reward appeals to the followers. As you are aware there is no

point offering chocolate as a reward to somebody that likes crisps. This is

because they will not view chocolate as a reward, so there is no incentive to

complete the task.

Secondly – the followers have to believe that the leader will give them (or

arrange for them to receive) the reward promised once the task is completed

by them.

Thirdly – the reward should be proportionate to the task the follower has to

complete. For example it would be disproportionate to reward an employee

with a promotion for making a cup of tea. Similarly a follower would feel

undervalued, if rewarded with a £5 gift voucher after they spent six months

doing their managers job without a pay rise.

This type of power needs to be used carefully to prevent followers becoming

accustomed to rewards and refusing to complete routine tasks without a

reward. Generally rewards should not be offered, to follower employees to

complete duties which are a normal part of their role. This is because as an



employee they are under a contractual obligation to complete these tasks and

they are already rewarded for this through their salary.

The other reason why rewards should be offered carefully is that frequent use

can reduce the impact or influence that offering a reward initially had on the

follower. Followers will soon tire of the reward especially if the reward is small

for example chocolates or flowers.

Coercive Power

This is the opposite of reward power because this power is based on the leader

having control over what happens if followers do not act as required. If followers do

not undertake the action required, the leader will impose a penalty. Penalties take a

variety of forms including withdrawal of privileges, job losses, verbal abuse, and

delayed or loss of promotion. In all cases the leader will need to choose the penalty

carefully to prevent breaking the law or being the subject of an employment tribunal.

Coercive power requires followers to believe that the leader has the ability to

impose the stated penalty. Also the penalty has to be something that the

followers do not want to have imposed on them. For example a penalty results

in coffee being banned is unlikely to influence a tea drinker.

Finally (just as the reward in reward power should be proportional to the

action taken by the follower), the penalty should be proportionate to the action

not completed by the follower. For example it would be disproportionate to fire

an employee follower the first time they do not return from their lunch break at

the stated time. Similarly it is disproportionate to reduce the wages of an

employee follower that hasn’t completed their duties over a six month period

by £20 when their monthly pay is £1000.

Coercive powers should be used carefully; overuse can lead to unhappy

employee followers. Unhappy followers can be negative or unmotivated; they

may resign or adopt a “work to rule” attitude. Work to rule is where employees



refuse to undertake any duties (or adopt working practices) that are not stated

in their contract.

Legitimate Power

This is the power that a leader has when the followers believe that the leader has “a

right” to instruct them and that they have an obligation to follow instructions.

Sometimes legitimacy power is created by the leader’s job title (such as captain,

doctor, or area manager), combined with the follower’s belief that the job title gives

the leader the right to give them orders.

Referent Power

This is created when the followers believe that the leader possess qualities that they

admire and would like to possess. The followers identify with their leader and attempt

to copy their leader. As referent power is dependant on how the follower views the

personality of their leader, a leader will not have referent power over every follower

they lead. Some leaders will have referent power over just a few, whilst others such

as Gandhi have lead millions through their personality and charisma.

Expert Power

As the title suggests a leader has expert power when the followers believe that the

leader has “expert” knowledge or skills that are relevant to the job or tasks they have

to complete. Often an experienced member of the team or staff in an organization

can have expert power even though they are not a supervisor or manager.

Controlling



Controlling as a management function involves following steps:

1. Establishment of standards- Standards are the plans or the targets which

have to be achieved in the course of business function. They can also be

called as the criterions for judging the performance. Standards generally are

classified into two-

a. Measurable or tangible - Those standards which can be measured and

expressed are called as measurable standards. They can be in form of

cost, output, expenditure, time, profit, etc.

b. Non-measurable or intangible- There are standards which cannot be

measured monetarily. For example- performance of a manager,

deviation of workers, their attitudes towards a concern. These are

called as intangible standards.

Controlling becomes easy through establishment of these standards because

controlling is exercised on the basis of these standards.

2. Measurement of performance- The second major step in controlling is to

measure the performance. Finding out deviations becomes easy through

measuring the actual performance. Performance levels are sometimes easy

to measure and sometimes difficult. Measurement of tangible standards is

easy as it can be expressed in units, cost, money terms, etc. Quantitative

measurement becomes difficult when performance of manager has to be

measured. Performance of a manager cannot be measured in quantities. It

can be measured only by-

a. Attitude of the workers,

b. Their morale to work,

c. The development in the attitudes regarding the physical environment,

and

d. Their communication with the superiors.



It is also sometimes done through various reports like weekly, monthly,

quarterly, yearly reports.

3. Comparison of actual and standard performance- Comparison of actual

performance with the planned targets is very important. Deviation can be

defined as the gap between actual performance and the planned targets. The

manager has to find out two things here- extent of deviation and cause of

deviation. Extent of deviation means that the manager has to find out whether

the deviation is positive or negative or whether the actual performance is in

conformity with the planned performance. The managers have to exercise

control by exception. He has to find out those deviations which are critical and

important for business. Minor deviations have to be ignored. Major deviations

like replacement of machinery, appointment of workers, quality of raw

material, rate of profits, etc. should be looked upon consciously. Therefore it is

said, “If a manager controls everything, he ends up controlling nothing.” For

example, if stationery charges increase by a minor 5 to 10%, it can be called

as a minor deviation. On the other hand, if monthly production decreases

continuously, it is called as major deviation.

Once the deviation is identified, a manager has to think about various cause

which has led to deviation. The causes can be-

a. Erroneous planning,

b. Co-ordination loosens,

c. Implementation of plans is defective, and

d. Supervision and communication is ineffective, etc.



4. Taking remedial actions- Once the causes and extent of deviations are

known, the manager has to detect those errors and take remedial measures

for it. There are two alternatives here-

a. Taking corrective measures for deviations which have occurred; and

b. After taking the corrective measures, if the actual performance is not in

conformity with plans, the manager can revise the targets. It is here the

controlling process comes to an end. Follow up is an important step

because it is only through taking corrective measures, a manager can

exercise controlling.

Types of control (on the basis of activities):

Feed forward: when corrective measures are before the start of activity. E.g.

McDonalds train workers how to grow potatoes, it minimizes the wastage.

Concurrent: when the activity is in progress and the worker doing his work and he is

being controlled

Feedback: controlling measures are taken after the activity performed. E.g. income

statement

Qualities of good control system:

The management of any organization must develop a control system tailored to its

organization's goals and resources. Effective control systems share several common

characteristics. These characteristics are as follows:

A focus on critical points. For example, controls are applied where failure

cannot be tolerated or where costs cannot exceed a certain amount. The

critical points include all the areas of an organization's operations that directly

affect the success of its key operations.

Integration into established processes. Controls must function harmoniously

within these processes and should not bottleneck operations.



Acceptance by employees. Employee involvement in the design of controls

can increase acceptance.

Availability of information when needed. Deadlines, time needed to

complete the project, costs associated with the project, and priority needs are

apparent in these criteria. Costs are frequently attributed to time shortcomings

or failures.

Economic feasibility. Effective control systems answer questions such as,

“How much does it cost?” “What will it save?” or “What are the returns on the

investment?” In short, comparison of the costs to the benefits ensures that the

benefits of controls outweigh the costs.

Accuracy. Effective control systems provide factual information that's useful,

reliable, valid, and consistent.

Comprehensibility. Controls must be simple and easy to understand.


notes of management concepts

Documents

levels of management

management levelsthere

management concepts

management rolesa manager

different ways of management

organization departments

members of organization

sizes of organization