UNIT-1

INTRODUCTION TO MANAGEMENT
Definition of Management- Function of Management- Management as a Science and Art-
Management as a Profession- Universality of Management- Henri Faylo’s Administrative
Theory –Elton Mayo’s Human Relations Movement- Systems theory – Contingency theory-
Monetary and non-monetary incentives to motivate work teams- Leadership –Definition-
Qualities of successful leaders- Different leadership styles.

MANAGEMENT:
In the present society some of the organizations will have tremendous growth within a
short period of time and whereas many of the organizations are struggling for their growth
and survival from a long period of time. Some of the companies are providing effective
compensation policies than the others in the same industry, affected by same internal and
external factors. The reason behind this will depends on the effectiveness of management.
Thus, the success or failure of an organization will depend on its management.
The word “Management” has derived from the old French word menagement, which
means “ the art of conducting and directing”. It also relates to the Latin word manuagere
meaning to “lead by the hand”.
Management can be defined in many ways such as:
Ivancerich, Donnelly and Gibson, define management as “the process undertaken by one or
more persons to coordinate the activities of others persons to achieve results not attainable by
any one individual alone”.
According to John A. Pearce and Richard B. Robinson management can be defined as “the
process of optimizing human, material and financial contributions for the achievement of
organizational goals”.
In simple words management can be defined as “things done by others”.
NATURE OF MANAGEMENT:
As blood, soul & mind are important for the life, same as management is for business.
Someone has written, "Management is the soul of Industrial development." The progress and
prosperity of business organization is based on management. It is the brain of an
organization, without management nothing can be done in the business.
i. Management is universal:
Management is taken as universal activity whether an organization is big or small,
government, hospitals, schools, colleges, etc. management is needed. Wherever there is a

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human activity there is management. Every step of life requires management because with
the help of management each & every task can be handled easily, properly & effectively.
ii. Management, social process:
Management involves dealing with the people, the effort of human beings are controlled &
directed by the management. It has social obligation to make efficient use of scare material
for the benefit of the society.
iii. Goal oriented:
Effective management is always management by objectives and also it has no justification to
exist without goals. An efficient and good management tries to achieve the predetermined
goals by the minimum resources. Management is established only to achieve the goal. Hence,
it is goal oriented.
iv. Science & Art:
Management is both science and art. It is based on some skills; knowledge is also required to
achieve the goals effectively. So, it is concerned with art tough it is not exactly like music or
dance.
v. Group Effort:
It deals with group of activities because no individual can do all the activities at the same
time. So, it is based on group efforts. It is also used to achieve the common goals with group
efforts. A group also can achieve the predetermined goals easily and effectively.
vi. Intangible:
It is important but unseen process of the organization. We can only feel it. It cannot be seen
functioning with eyes but can feel by observing the result.
vii. Required at all level:
It is one of such process which requires all level, top level, middle level & low level of an
organization. According to levels the process of management is different.
viii. Separate from ownership:
Management & ownership are two different things in a company. In a company, shareholders
are the owner and managerial work is in the hand of 'Board of Directors'.
ix. Purposeful activity:
The activity of management is connected with planning, direction, controlling, staffing, etc.
and also there is some purpose behind it. Its main aim is to achieve the economic and social
objective. Without any purpose management cannot be formed.
IMPORTANCE OF MANAGEMENT:
Management is universal and pervasive because of its significance such as:

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 i. Providing managers with useful insight into reality:
Management principles act as guidelines for the managers. These principles improve
knowledge, ability and understanding of managers under various managerial situations. The
effects of these principles help the managers to learn from their mistakes. These principles
guide managers to take right decision at the right time.
ii. Optimum utilization of resources:
The management principles insist on planned activities and systematic organization of men
and materials in the organization. Principles are designed to get maximum benefits from the
human efforts and other resources. For example, scientific principles suggest to cut down the
wasteful movements and setting up of standard time to complete a task. By saving time,
energy and efforts activities can be made economical and result in maximum utilization of
resources.
iii. Scientific decisions:
Managers have to take number of decisions every day. So they need to assess the resources of
organizations very carefully so that the appropriate decision can be taken by using the
available resources in best possible manner. The management principles enable the managers
to approach various problems systematically and scientifically For example, Taylor’s
principles always insisted on replacement of rule of thumb by scientific approach i.e., he
suggested to conduct the time study to set up the standard time required to perform a job
rather than leaving it at the discretion or will of manager.
iv. Meeting changing environment requirement:
Every businessman has to make changes in the organization according to changes taking
place in the business environment. Management principles train the managers in
implementing the changes in right direction and at right level in the organization. Although
management principles are relative and general guidelines yet by modifying these principles
changes can be made in the organization.
v. Effective administration:
Administration is the function of top level management. In this function major plans and
policies are formed. The management principles act as guidelines and base to form various
administrative policies to have systematic working in the organization. Management
principles make administration more effective by discouraging personal prejudices and
biases. These principles insist on objectivity and scientific decisions. For example, principle
of unity of command, scalar chain, and unity of direction leads to systematic and smooth
functioning of the organization as unity of command avoids confusion of more bosses. Unity

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 of direction unifies the efforts of all the employees in common direction and scalar chain
results in systematic flow of information. So all these principles definitely bring effective and
efficient administration.
vi. Fulfilling Social responsibilities:
A business is creation of society and makes use of resources of society so it must do
something for society also by performing some social responsibilities. Management
principles not only act as guidelines for achieving organizational objectives but these
principles also guide the managers to perform social responsibilities. For example, the
principle of fair remuneration insists on adequate salary to employees and takes care of
interest of employees also.
vii. Management Training, Education and Research:
The management principles stress on scientific judgments and logical thinking. As a result
these principles act as base of doing research and development in management studies. As
these principles provide organized body of knowledge to perform research work and generate
more and more knowledge, they have provided new ideas, imagination and base for research
and development.
MANAGEMENT FUNCTIONS:
The primary functions of management include:
i. Planning
ii. Organizing
iii. Staffing
iv. Directing
v. Controlling
Controlling function comprises of coordinating, reporting and budgeting. Based on this the
functions of management can be coined the word “POSDCORB”, which represents seven
functions of management.
i. Planning: planning is a continuous and future oriented process which represents selecting
the best course of action. An effective planning programme is affected by both external
and internal factors. The external factors include scarcity of resources ( capital, material,
human), economic changes, technical changes, political etc. whereas the internal factors
includes changes in workforce, organization structure, diversification etc.
ii. Organizing: organizing requires a formal structure of flow of authorities and direction in
order to coordinate all the activities to achieve the prescribed objectives. Thus, the
function of organizing concerned with:

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  Identifying the tasks that must be performed and grouping them whenever
necessary
 Assigning these tasks to the personnel and defining their authority and
responsibility
 Delegating the authority to the employees
 Establishing a relationship between authority and responsibility
 Coordinating these activities.
iii. Staffing: It is a function of hiring and retaining a suitable workforce at managerial and
non-managerial levels. The sub functions of staffing are recruiting, training, developing,
compensating, appraising, maintaining, motivating etc. This function is most important
and critical since the individuals differ in their intelligence, knowledge, skills, experience,
physical condition, age , attitude etc.
iv. Directing: It includes instructing and guiding the subordinates about the procedures and
methods. It concerned with leadership, communication, motivation, supervision etc.
v. Controlling: the function of control consists of those activities that are undertaken to
ensure that the events do not deviate from the pre-arranged plans. Thus, controlling can
be defined as the minimizing the gap between the expected and standard performance.
The activities include to control are:
 Establishing the standard performance.
 Measuring performance and comparing with standard performance
 Taking corrective actions.
MANAGEMENT AS A SCIENCE:
Science is a systematic body of knowledge that represents the general facts which explains a
phenomenon. It establishes cause and effect relationship between two or more variables and
underlines the principles governing their relationship. Some of the basic characteristics which
explain management as a science are:
i. Universally acceptance principles: Scientific principles represent basic facts, which can
be applied in all the situations, at any place and at any time. The principles of
management such as unity of direction, division of labour etc can be applied universally.
ii. Experimentation and observation: The fundamental principles of management were
derived by conducting scientific experiments and through the observations. For example,
the employees will be more satisfied when they receive fair remuneration.

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iii. Cause & Effect Relationship: Management explains the cause and effect relationship
between the variables. For examples, lack of balance (cause) between authority &
responsibility will leads to ineffectiveness (effect).
iv. Test of validity & predictability: The principles of management can be tested for
validity. i.e, the principle of unity of command, can be tested by using two employees,
one with single superior and other with two superiors.
Thus, management is a systematic body of knowledge but not pure science like physics,
chemistry, biology etc. It is because it deals with human, who possesses different attitudes
and behaviours and it is very difficult to predict such behaviours. Thus, management is
known as social science.
MANAGEMENT AS AN ART:
Art can be defined as the application of theoretical knowledge & skills to get desired results.
The various characteristics of management as art include:
A. Practical knowledge: An artist should have the practical knowledge related to the
applications of theoretical principles. A person never become a manager just by getting
the degree of management, he/she should have the knowledge to use the various
principles and concepts of management according to the situation.

B. Personal skills: The effectiveness of management depends upon the personal skills of
management that an individual possesses.

C. Creative: A manager has to take business decisions in different situations, which may not
occur earlier. For this he/she requires intelligence and imagination for effective
coordination of human and non-human resources. Thus, an effective manager should be
more creative.

D. Perfection through practise: An artist should have the tendency of getting more
perfection through their practise. A manager learns from trail and error method at the
initial stage and the applications of management principles makes them perfect over their
experience during their service.
E. Goal oriented: The success of an artist depends upon their ability to achieve the desired
goals. In the same manner, managers are also directed towards accomplishment of pre-
defined goals.
MANAGEMENT AS A PROFESSION:

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 The expansion and changes in the business world has created more demand for professionally
qualified managers. As a result of this has developed management as a profession. A
profession can be considered as an “occupation that requires specialized knowledge and
intensive academic preparations to which entry is regulated by a representative body. The
various characteristics of management to be as a profession are:
i. Formal education & Training: The academic knowledge of management can be taught
by many formal educational institutions. Law does not prescribe any qualification for a
manager but in order to perform the activities more efficiently the managers should have
basic knowledge in their respective areas.
ii. Specialized knowledge: Managers require systematic knowledge of principles and
techniques of management to solve the business problems.
iii. Social obligations: Like other professions managers also have some responsibilities
towards the various parties of society, which includes shareholders, customers,
employees, public, government, law etc.
iv. Code of conduct: A professional has to abide by code of conduct which contains rules
and regulations, norms of honesty, integrity and special ethics. In order to ensure self
disciplines among the members management associations has defined code of conduct.
And has the right to take actions if any of the member violate the code of conduct.
TAYLOR’S THEORY:
After the industrial revolution the business in America has more scope for its growth
and expansion and the labor force in America are more reliable, hardworking but have less
intellectual skills. The problem can be resolved in two ways:
 Substituting the capital for labor
 Increasing the efficiency of labor.
Thus, scientific management emerged as a means of studying work process and finding ways
to make them more efficient.
Frederick Winslow Taylor, who is known father of scientific management has
concentrated on second way( increasing through efficiency of labor). He joined the American
Society of Mechanical Engineers in 1886 and used this organization to develop and test the
ideas and formulate while working in various steel firms. In one of these firms, Midvale Steel
Company, he observed the labor productivity is far less and he believed that the reason for
this is the ignorance of fair day’s work. At that time there is no method to determine expected
daily output per worker, work standard and wage system.
The four principles contributed by F.W. Taylor for increasing the labor efficiency are:

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 i. Determining the method of doing work.
ii. Define the rules and standards to perform the task by using new method.
iii. Implementing the scientific methods in selection and training the employees.
iv. Introduction of incentive pay system.
Contribution of Gilbreths to scientific management approach:
F. W. Taylor is not the single management thinker of scientific management
approach. Frank Gilbreth and Lillian Gilbreth (wife and husband) has extended the ideas of
Taylor. The Gilbreths has broken the job into its elementary components and find the better
way to perform each component action which is called as time and motion study. Time and
motion study is the process of analyzing work to determine the most efficient motions for
performing tasks and to determine the appropriate elapsed time for the completion of the task
or job.
FAYOL’S PRINCIPLES OF MANAGEMENT:
Henri Fayol was the CEO of comambault Mining when he proposed the fourteen
principles for effective management. Fayol devised his principles base on his observations of
workers and managers at his company.
The fourteen principles include:
i. Division of labor:
The efficiency of a job dependents on the specialized worker performing the job thus, as the
labor are more specialized the efficiency of the work will increases.
ii. Authority and responsibility:
Managers must have the authority to give orders and they must have the responsibility for the
effectiveness of their department.
iii. Unity of command:
This principle states that an employee should receive instructions from only one superior.
When an employee gets the instructions from more than one superior it creates conflicts in
instructions and confusion to the employees.
iv. Unity of direction:
The employees working within an organization and who has same objective should be
directed by same plan of action.
v. Line of authority:
The line of authority should flow in a descending order. The top level management should
have more authorities than middle level than lowest level in an organization.
vi. Centralization:

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Centralization means possessing the complete authorities in the single hand where as
assigning some of the authorities to the subordinates is known as decentralization. Fayol says
that the top level management delegate some of the authorities to their subordinates so that
they are able to fulfill their responsibilities.
vii. Initiative:
Fayol believes that the managers should encourage the employees to take initiative that
benefits to the organization.
viii. Discipline:
Members of an organization need to respect to the rules and agreements that govern the
organization. Fayol emphasized that employees should be expected to be obedient, energetic,
concerned about the welfare of the organization.
ix. Order:
It describes the arrangement of jobs, employees and materials to provide the organization
with great benefits and to provide career development opportunity to the employees.
x. Equity:
The employees will perform at their higher level when the managers are treating them with
respect, harmony and justice.
xi. Remuneration:
The employee commitment towards the organization can be influenced by the returns that the
organization is providing to them. Thus, for effective performance of an employee the
organization has to pay fair remuneration to their employees.
xii. Subordination of individual interest with organizational interest:
The goals of an organization can be achieved by their employees. Hence, the managers
should make the individual employees to define their goals with respect to the organizational
goals.
xiii. Stability:
The long term employment of the employees helps them to develop the skills and potential in
order to make significant contribution to the organization.
xiv. Esprit de corps:
Promoting team spirit will give the organization a sense of unity. To Fayol, even small
factors could help to develop the spirit. For example, the use of verbal communication instead
of written will develop a sense of attachment among the employees.
HAWTHORNE EXPERIMENT:

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 A well-known series of research studies conducted at the Hawthorne works of the
Western Electric company. (Behavioral approach). The studies were conducted between 1924
and 1933 and are known as Hawthorne Studies.

Basis for experiment:

The research was initiated as an attempt to determine whether physical characteristics
of the work setting such as level of illumination affect worker performance. The research was
conducted by changing the illumination factors. Basically the workers has been classified into
two groups, test group and control group. The various lighting/ illumination factors has been
provided to the test group.
Result of the experiment:
According to the Taylor’s scientific theory the performance of test group has to be
increased. But the results produced by the experiments were surprising. The performance of
control group and test group has been increased to a great extend regardless of illumination
factors. The performance dropped only when the level of illumination factors are very less.
Mayo’s contribution:
To find out the reason for the results the investigators recruited noted Harvard
Psychologist Elton Mayo. Mayo proposed series of experiments for a period of two years on
the different group of female workers by changing different illumination factors such as
length of rest time, frequency of rest time, flexible work timings etc.
Mayo also found the results i.e, increase in the performance of workers irrespective of
illumination factors and he discovered the reason for the increase in performance is the
presence of researcher in the workplace. The presence of researcher was affecting the
performance because the workers enjoyed the attention and produced the results they
believed the researchers wanted.
Hawthorne effect:
The effect of increase in productivity due to the increased attention of the researcher
is known as Hawthorne Effect.
Thus, Elton Mayo has concluded that the presence of researcher will increases the
performance of workers.
SYSTEMS APPROACH TO MANAGEMENT:
This approach considers organization as a system. This approach focuses on solving
technical rather than human behavior problems. According to this approach an organization is
considered as the interrelated parts with a unified purpose. From this perspective,

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management should focus on efficiency and effectiveness in each part of the organization,
with the understanding that actions taken in one part of the organization affect other parts of
the organization. For example, a new policy in production department may affect the
different departments such as marketing, finance, human etc,. Thus, in an organization no
department exists and operates in isolation from the other.
The approach also views the organization as lined to its environment. Organizational
effectiveness, even survival, depends on the organization interaction with its environment.
Key concepts of systems approach:
 Subsystem:
Subsystems are those parts which make up the whole system. Each system in turn may be a
subsystem of a large system. For example, factory is a subsystem of a firm, firm is a
subsystem of an industry; industry is a subsystem of national economy.
 Synergy:
It describes that the departments that interact with co-operation are more productive than they
operate in isolation, which is known as synergy.
 Open system:
An organization (System) which interacts with its environment is known as open system. i.e.,
it is influenced and influencing the environment.
 Closed system:
It is a system which does not interact with its environment.
 System boundary:
It is the limit or boundary within which an organization can operate. In closed system it is
rigid and in open system it is flexible.
 Flows:
Generally the materials, men and energy flows from one point to other. If a manufacturing
unit is considered the input undergo transformation and exit as output.

External environment

Output
Input Transformation

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Feedback
  Feedback:
It is the system in which the results of actions are returned to the individuals, allowing work
procedures to be analyzed and corrected.
CONTINGENCY THEORY OF MANAGEMENT:
A contingency approach to management is based on the theory that management
effectiveness is contingent, or dependent, upon the interplay between the application of
management behaviors and specific situations. 
Fiedler's Contingency Theory proposes the following concepts:
Fiedler's Contingency Theory says there is no one best way to manage an organization.
Fiedler's Contingency Theory of leadership says that a leader must be able to identify which
management style will help to achieve the organization's goals in a particular situation
The main component of Fiedler's Contingency Theory is the least preferred co-worker (LPC)
scale which measures a manager's leadership orientation.
This theory was developed by based on the contingency theory of leadership
developed by Fred Fiedler. The theory states that management effectiveness, as it relates to
group effectiveness, is a component of two factors: task motivation, or relation motivation,
and circumstances. Task motivation or relation motivation, can be measured by the least
preferred co-worker (LPC) scale.
Least Preferred Co-worker, who would like to work with the manager again, will give
score to the manager on a range of scales between positive factors (friendly, helpful, cheerful
etc) and negative factors (unfriendly, unhelpful, gloomy etc).
For example:
Unfriendly 1 2 3 4 5 6 7 8 Friendly
Unpleasant 1 2 3 4 5 6 7 8 Pleasant
Tense 1 2 3 4 5 6 7 8 Relaxed

High LPC leaders tend to have close and positive relationships and act in a supportive way,
even prioritizing the relationship before the task. Low LPC leaders put the task first and
will turn to relationships only when they are satisfied with progress of the work is going
on.

Three factors are then identified about the leader, member and the task, as follows:
 Leader-Member Relations: The extent to which the leader has the support and
loyalties of followers and relations with them are friendly and cooperative.

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  Task structure: The extent to which tasks are standardised, documented and
controlled.
 Leader's Position-power: The extent to which the leader has authority to assess
follower performance and give reward or punishment.

The best LPC approach depends on a combination of these three. Generally, a high LPC
approach is best when leader-member relations are poor, except when the task is
unstructured and the leader is weak, in which a low LPC style is better.
Leader's Most
Leader-Member
# Task structure Position- Effective
Relations
power leader
1 Good Structured Strong Low LPC
2 Good Structured Weak Low LPC
3 Good Unstructured Strong Low LPC
4 Good Unstructured Weak High LPC
5 Poor Structured Strong High LPC
6 Poor Structured Weak High LPC
7 Poor Unstructured Strong High LPC
8 Poor Unstructured Weak Low LPC
MOTIVATION:
Motivation is derived from the word motive. The term motive is derived from the
Latin word ‘moverse’, which means to move. Motive is defined as an inner state that
energizes, activates and directs the behavior of individuals towards certain goals. Motivation
starts with an unsatisfied condition and ends with movement to release that unsatisfied
condition, with goal directed behavior as a part of the process
According to Encyclopedia of management, “motivation refers to the degree of
readiness of an organization to pursue some designated goal and implies the determination of
the nature and locus of the forces, including the degree of readiness”.
Types of motives:
Motives are classified into three types. They are primary motives, general motives and
secondary motives.
 Primary motives:
These are unlearned and are psychological, biological. Ex: hungry, sleep, etc.
 General motives:
These are unlearned and not physiological which can’t be classified either as primary
motives or secondary motives. Ex: Curiosity, manipulation, affection etc.

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  Secondary motives:
These play a vital role in organization behavior. These are closely related to learning
concepts. Ex: Need for security, need for power etc.
Types of Motivation:
The performance of an individual can be increased in two ways. i.e, by giving positive
motivation and negative motivation.
 Positive motivation:
In case of positive motivation the efficiency of an individual can be increased by
providing some rewards, appreciation, awards, (monetary or non-monetary), additional
benefits etc.
 Negative motivation:
When the employees are very lazy, work avoiding, not initiative then the awards, rewards
won’t change their performance. The managers will take stick action such as
punishments, to increase the performance of these people. Enhancing the performance of
an individual by taking serious action, giving punishment, by creating fear of losing job
etc is known as negative motivation.
MOTIVATIONAL THEORIES:

Need Theories:
Over the years psychologists have studied a number of concepts that have represented
the energetic force, which constitutes human motivation. The most commonly used concept
in theories of work motivation is “needs”.
MASLOW’S THEORY:
Abraham Maslow, a clinical psychologist developed a motivational theory known as
hierarchy of needs. Maslow’s theory is easy to understand thus, it is widely accepted today
in management theory and practices. As the needs are in a hierarchical manner this theory can
also known as hierarchical theory of needs.
Assumptions:
Maslow’s has explained the needs based on two assumptions. They are:
 Each person’s needs depend on what he already has. Only needs not yet satisfied can
influence behavior. A satisfied need cannot influence behavior.
 Needs are arranged in a hierarchy of importance. Once one need is satisfied, another
emerges and demands satisfaction.

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 Maslow has classified the individual needs in 5 levels. The lowest one is the
physiological needs and the highest is self actualization.
I. Physiological needs:
These are the basic needs of an individual such as water, air, food, etc. Maslow states that
until these are satisfied an individual no other needs will serve as a basis for motivation.
Organizational factors that might satisfy psychological needs are pay, allowances, incentives,
benefits etc.
II. Security or safety needs:
Safety needs include protection from physical harm, ill, health, economic disaster etc. once
the physiological needs are satisfied then the individual thinks to continue to satisfy these
physiological needs. Job security, membership in unions, severance pay, retirement plan,
health benefits etc will be considered as security/safety needs in an organization.
III. Social needs:
Social needs are related to the social nature of people and to their need for companionship.
Non-satisfaction in this level of needs may affect the individual’s mental health.
Organizational conditions that help to satisfy these needs include encouraging team building,
providing supportive supervision practices, permitting coworkers opportunity to interact
socially on the job. These are also known as affiliation or acceptance needs.
IV. Esteem needs:
Esteem needs comprise both the awareness of one’s importance to others( self-esteem) and
the actual esteem of others. The satisfaction of these esteem needs leads to self-confidence
and prestige. These needs are power, status, self-confidence, prestige. For an employee these
represent status symbols, awards, promotions, titles, promotion
V. Self-actualization:
This is the highest need in hierarchy. This refers to the desire to become more and more what
one is, to become everything one is capable of becoming. Maslow proposes that the
satisfaction of self-actualization needs will tend to increase the strength of all the other needs.
Organizations can help employees satisfy self-actualization needs by encouraging creativity,
allowing risk-taking decision making, supporting workers in their efforts to develop their
skills.

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 NEED WORK EXAMPLE
Physiological needs Pay, allowances, incentives, benefits
Job security, membership in unions,
Safety/ security needs severance pay. retirement plan, health
benefits
encouraging team building, providing
supportive supervision practices,
Social needs
permitting coworkers opportunity to
interact socially on the job,
status symbols, awards, promotions,
Esteem needs
titles, promotion
creativity, allowing risk-taking decision
Self-actualization making, supporting workers in their
efforts to develop their skills

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HERZBERG'S TWO FACTOR THEORY:

Frederick Hertzberg has modified the Maslow's theory of motivation into two factors.
He conducted his study based on the need satisfaction on 200engineers and accountants. He
defined the two factors by asking the participants about the most satisfactory and
dissatisfactory factors. The participants then expressed the different working conditions fo
their feeling. The two factors identified by Hertzberg are: maintenance factors and
motivators.
Maintenance factors:

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 In the absence of the factors will lead to the dissatisfaction of an individual but the
presence can't satisfy are known as maintenance factors or dissatisfies or hygiene factors.
Satisfiers or motivators:
These are the factors whose presence will satisfy an individual and the absence of
these factors may not effect.
The various satisfiers and dissatisfies include :
Dis- satisfiers Satisfiers
Company policies, pay, relationship with Recognition, achievement,
superior, Working conditions, job security, advancement, work itself, possibility of
personal life, technical support, etc., growth, responsibility etc
THEORY X AND THEORY Y:
Douglas Mc Gregor proposed two different views of human being. One view of
negative human beings and the other is positive human beings.
Theory X:
Mc Gregor has explained about the negative characteristics of human beings under Theory X.
The characteristics of individuals under this are:
 Dislike the work
 Lazy
 Avoid work
 Lack of initiativeness
 Need continues monitoring
 Little ambitious
 Avoided responsibilities
Theory Y:
Under theory Y he describe the positive human being, Who are
 Working with interest and commitment
 Initiative
 Seek responsibilities
 Has more potential
 Self-directed and self controlled.
 Intelligent and creative.

Motivation:

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Theory X:
Individuals fall under theory x are self-centered , indifferent towards organizational goals and
thus , managers can motivate these individuals by using negative motivation such as
punishments, threatening, coercion etc. Generally this type of employees will be seen in
govt. organizations and the public sectors where the employees are not trusted.
Theory Y:
As these individuals are self controlled the managers can easily motivate them by
positive motivation. The motivational factors may include job design, job enrichment , more
responsibilities, awards etc. Mostly the private sector employees will be considered as theory
Y.
LEADERSHIP STYLES:
Leadership is a part of management but not all of it. Leadership is the ability to
persuade others to seek defined objectives enthusiastically. It is the human factor which binds
a group together and motivates it towards goals. Management activities such as planning,
organizing and decision making are dormant cocoons ( No change in its state) until the leader
triggers the power of motivation in people and guides them toward goals.
Leadership is defined as “the process whereby one individual influences other group
members towards the attainment of defined group or organizational goals.” It is viewed that
the followers also influence leaders in fact leader and follower influence each other mutually.
Characteristics of follower that influence leader are:
 Followers Performance
 Followers characteristics
 Nature of work
 Business policies
Characteristics of leader that influence followers are ( Powers of leader):
 Reward power
 Leader character
 Coercive( punish) power
 Expert power
 Legitimate Power (influence through guiding in doing a Job)
 Referent power
LEADERSHIP QUALITIES

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 i. Integrity: Integrity is the integration of outward actions and inner values. A person of
integrity is the same on the outside and on the inside. Such an individual can be trusted
because he or she never veers from inner values, even when it might be expeditious to do so.
A leader must have the trust of followers and therefore must display integrity.
ii. Dedication: A leader inspires dedication by example, doing whatever it takes to complete the
next step toward the vision. By setting an excellent example, leaders can show followers that
there are no nine-to-five jobs on the team, only opportunities to achieve something great.
iii. Honest: Honest dealings, predictable reactions, well-controlled emotions, and an
absence of tantrums and harsh outbursts are all signs of integrity. A leader who is centered in
integrity will be more approachable by followers.
iv. Magnanimity: Magnanimity means giving credit where it is due. A magnanimous
leader ensures that credit for successes is spread as widely as possible throughout the
company. Conversely, a good leader takes personal responsibility for failures. This sort of
reverse magnanimity helps other people feel good about themselves and draws the team
closer together. To spread the fame and take the blame is a hallmark of effective leadership.
v. Humility: Leaders with humility recognize that they are no better or worse than other
members of the team. A humble leader is not self-effacing but rather tries to elevate
everyone. Leaders with humility also understand that their status does not make them a god.
Mahatma Gandhi is a role model for Indian leaders, and he pursued a “follower-centric”
leadership role.
vi. Openness: Openness means being able to listen to new ideas, even if they do not
conform to the usual way of thinking. Good leaders are able to suspend judgment while
listening to others’ ideas, as well as accept new ways of doing things that someone else
thought of. Openness builds mutual respect and trust between leaders and followers, and it
also keeps the team well supplied with new ideas that can further its vision.
vii. Creativity: It is the ability to think differently, to get outside of the box that
constrains solutions. Creativity gives leaders the ability to see things that others have not seen
and thus lead followers in new directions.
viii. Fairness: Fairness means dealing with others consistently and justly. A leader must
check all the facts and hear everyone out before passing judgment. He or she must avoid
leaping to conclusions based on incomplete evidence. When people feel that they are being
treated fairly, they reward a leader with loyalty and dedication.
ix. Assertiveness: It represents the ability to clearly state what one expects so that there
will be no misunderstandings. A leader must be assertive to get the desired results. Along

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 with assertiveness comes the responsibility to clearly understand what followers expect from
their leader.
x. Sense of humor: A sense of humor is vital to relieve tension and boredom, as well as
to defuse hostility. Effective leaders know how to use humor to energize followers. Humor is
a form of power that provides some control over the work environment. And simply put,
humor fosters good camaraderie.
LEADERSHIP STYLES:
Leadership is practiced by its styles which may be positive or negative. The styles
used by the military officers and traditional managers are mostly negatives whereas those of
the modern and high-technology organizations are positive.
Ex: Positive styles—Toyota, Lucky-Goldstar (LG) , Samsung, Hyundai…..
Negative styles – Indian public sector companies – Indian railway, HCL, HMT….
There is no clear-cut leadership style which is suitable or applicable universally and in all
situations. Thus, the leaders have to adopt appropriate style depending upon the situation
demand. The various leadership styles based on the traditional theories are:
i. Free-rein or Laissen-faire style:
These leaders play less or negative role. They avoid authorities and responsibilities. They
mostly depend upon the group for all the activities such as defining objectives, goals,
policies, programmes etc. These leaders never provide training and motivation to the
followers. The group members train and motivate themselves.
ii. Autocratic style:
Autocratic leaders centralize decision making power with themselves. The followers does not
have a chance to express and involve in decision making and implementation. The followers
has to follow the instructions of leaders. The different types of autocratic leaders are:
 Strict autocratic – autocratic because their method of influencing subordinates is
negative.
 Benevolent autocratic – Typically gives rewards to the followers.
 Incompetent autocrat – autocratic to hide their incompetency.
iii. Democratic style:
These leaders decentralize the authority and encourage subordinates to express their opinion
in decision-making and implementation. But the final decision will be taken by the leader. i.e,
the decisions will be taken by consultation.
iv. Participative style:

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Participative leaders decentralize authority and encourage the subordinates to participate in
decision-making and implementation processes. Decision will be made by the leader and his
subordinates.

21 Prepared By: M. Umrez, Assistant Professor, Department of MBA