Behavioral theory:Behavioral theory of leadership emphasizes Fiedler's Contingency model:Fiedler's model assumes that

that strong leadership is the result of effective role behaviour . group performance depends on: Leadership style, described in terms
Leadership is shown by a person’s acts more than by his traits. of task motivation and relationship motivation•Situational
Task related functions•Group maintenance function. favourableness, determined by three factors: 1. Leader-member
Assumptions: Leaders can be made, rather than are born. relations - Degree to which a leader is accepted and supported by the
Successful leadership is based in definable, learnable behavior. group members. 2. Task structure - Extent to which the task is
structured and defined, with clear goals and procedures. 3. Position
Description:Behavioral theories of leadership do not seek inborn
power - The ability of a leader to control subordinates through reward
traits or capabilities. Rather, they look at what leaders actually do•
and punishment. When there is a good leader-member relation, a
If success can be defined in terms of describable actions, then it
highly structured task, and high leader position power, the situation is
should be relatively easy for other people to act in the same way. This
considered a "favorable situation." Fiedler found that low-LPC leaders
is easier to teach and learn then to adopt the more ephemeral 'traits'
are more effective in extremely favourable or unfavourable situations,
or 'capabilities'. Discussion:Behavioral is a big leap from Trait Theory,
whereas high-LPC leaders perform best in situations with
in that it assumes that leadership capability can be learned, rather
intermediate favourability.________________________________
than being inherent. This opens the floodgates to leadership
MBO:is a process of agreeing upon objectives within an organization
development, as opposed to simple psychometric assessment that
so that management and employees agree to the objectives and
sorts those with leadership potential from those who will never have
understand what they are in the organization. The term
the chance.A behavioral theory is relatively easy to develop, as you
"management by objectives" was first popularized by Peter Drucker in
simply assess both leadership success and the actions of leaders. With
his 1954 book 'The Practice of Management'.The essence of MBO is
a large enough study, you can then correlate statistically significant
participative goal setting, choosing course of actions and decision
behaviors with success. You can also identify behaviors which
making. An important part of the MBO is the measurement and the
contribute to failure, thus adding a second layer of understanding.
comparison of the employee’s actual performance with the standards
Limitation:Particular behavior may be functional at a point of time
set. Ideally, when employees themselves have been involved with the
but it may be dysfunctional at another point of time•Effectiveness of
goal setting and the choosing the course of action to be followed by
leadership behavior depends on various factor which are not in the
them, they are more likely to fulfill their responsibilities___________
leader but external to him like nature of followers and the situation
under which the leader behavior takes place__________________ Departmentalization:The horizontal differentiation of task or
activities into discrete segment is called departmentalization
Budget:A budget is a statement of anticipated results during a
Grouping activities and people into departments makes it possible for
designated time period expressed in financial and non financial
organization to expand their business activities•
termsM•As indicated in preceding section, three essential steps in the
Bases of departmentalization: Departmentalization by time: In this
control process include establishing standard, comparing results with
activities are grouped on the basis of timing of their performance
standards, and taking corrective action•In terms of these steps, the
Advantages:Service can be rendered that can go beyond 8
preparation of budget is, in effect, the step of establishing standards.
hrs•Uninterrupted working•Maximum usage of equipments•People
Types of budget:Sales budget: it is a comprehensive sales program
engaged in other activities Disadvantages: Supervision may be lacking
me and plan for developing sales. Sales forecasting is the basis for
during night shift•Employees may face fatigue•Working in shift may
preparing this budget •Selling and distribution cost budget: it includes
cause problem in coordination and communication•Accidental
advertising cost, research and development cost, transport cost etc.
occurrence. Departmentalization by function: Advantages
prepared by SM, AM, DM•Production budget: This budget is based on
•It is a simple form of grouping activities for small organisation
sales budget. It lays down the quantity of units to be produced during
•It promotes excellence in performance because of development
the budget period•Capital expenditure budget: this budget outlines
ofexpertise through specialization•It leads to improved planning and
specifically, capital expenditure for plant, machinery, equipment,
control of keys functions•It ensures economy, there is only one
inventories and other items•Cash budget: This budget gives the
department related to one function for the entire function
anticipated receipts & disbursement for the budget period and shows
Disadvantage:There may lack of inter departmental coordination•It
the cash position arising from it•Master budget: a master budget
may develop loyalty to a functional department and not organisation
gives a summary of all the functional budget and shows how they
as whole•Slow adoption to change in environment .______________
affect the business as a whole.____________________________
Selection:Selection procedure in any business concern is a matter Management:Mary Parker Follet “art of getting things done
through people”George R. Terry:“consisting of planning, organizing,
of choice•In some concern, it may be very simple as such it may
actuating and controlling, performed to determine and accomplish
consist merely of referring applicants to the supervisor with whom
the objectives by use of people and resource.”
they are to work•On the other hand in some other concern, it can be
a complicated and extensive involving several steps or stages. 14 Management principles of HENRY FAYOL:Division of
Steps and process of selection: Inviting application•Reception of work•Authority & Responsibility•Discipline •Unity of Command
application•Preliminary employment interview•Employment test •Subordinate of individual to general interest•Centralization.
•Investigating of reference•Physical examination•Final approval •Order•Remuneration of Personnel•Esprit de Corps.•Scalar Chain
•Placement and induction •Unity of direction•Stability of tenure•Equity•Initiative
Theory X and Theory Y: Douglas McGregor in his book, "The
Human Side of Enterprise" published in 1960 has examined theories
on behavior of individuals at work, and he has formulated two models
which he calls Theory X and Theory Y. Theory X :In this theory,
which many managers practice, management assumes employees are
inherently lazy and will avoid work if they can. They inherently dislike
work. Because of this, workers need to be closely supervised and
comprehensive systems of controls developed• A hierarchical
structure is needed with narrow span of control at each and every
level. According to this theory, employees will show little ambition
without an enticing incentive program and will avoid responsibility
whenever they can• If the organizational goals are to be met, theory
X managers rely heavily on threat and coercion to gain their
employee's compliance. Beliefs of this theory lead to mistrust, highly
restrictive supervision, and a punitive atmosphere•The Theory X
manager tends to believe that everything must end in blaming
someone. He or she thinks all prospective employees are only out for
themselves. Usually these managers feel the sole purpose of the
employee's interest in the job is money. They will blame the person
first in most situations, without questioning whether it may be the
system, policy, or lack of training that deserves the blame• A Theory X
manager believes that his or her employees do not really want to
work, that they would rather avoid responsibility and that it is the
manager's job to structure the work and energize the employee. One
major flaw of this management style is it is much more likely to cause
Diseconomies of Scale in large businesses.
Theory X Assumptions:The average human being has an
inherent dislike of work and will avoid it if he can• Because of their
dislike for work, most people must be controlled and threatened
before they will work hard enough• The average human prefers to be
directed, dislikes responsibility, is unambiguous, and desires security
above everything• These assumptions lie behind most organizational
principles today, and give rise both to "tough" management with
punishments and tight controls, and "soft" management which aims
at harmony at work•Both these are "wrong" because man needs
more than financial rewards at work, he also needs some deeper
higher order motivation - the opportunity to fulfill himself• Theory X
managers do not give their staff this opportunity so that the
employees behave in the expected fashion.___________________
Theory Y: In this theory, management assumes employees may be
ambitious and self-motivated and exercise self-control. It is believed
that employees enjoy their mental and physical work duties. To them
work is as natural as play. They possess the ability for creative
problem solving, but their talents are underused in most
organizations. Given the proper conditions, theory Y managers believe
that employees will learn to seek out and accept responsibility and to
exercise self-control and self-direction in accomplishing objectives to
which they are committed. A Theory Y manager believes that, given
the right conditions, most people will want to do well at work. They
believe that the satisfaction of doing a good job is a strong
motivation. Many people interpret Theory Y as a positive set of beliefs
about workers.A close reading of The Human Side of Enterprise
reveals that McGregor simply argues for managers to be open to a
more positive view of workers and the possibilities that this creates.
He thinks that Theory Y managers are more likely than Theory X
managers to develop the climate of trust with employees that is
required for human resource development. It's here through human
resource development that is a crucial aspect of any organization.
This would include managers communicating openly with
subordinates, minimizing the difference between superiorsubordinate
relationships, creating a comfortable environment in which
subordinates can develop and use their abilities. This climate would
include the sharing of decision making so that subordinates have say
Theory Y Assumptions: The expenditure of physical
and mental effort in work is as natural as play or rest.Control and
punishment are not the only ways to make people work, man will
direct himself if he is committed to the aims of the organization.If a
job is satisfying, then the result will be commitment to the
organization. The average man learns, under proper conditions, not
only to accept but to seek responsibility.Imagination, creativity, and
ingenuity can be used to solve work problems by a large number of
employees.Under the conditions of modern industrial life, the
intellectual potentialities of the average man are only partially
utilized.___________________________________________
Adams' Equity Theory: The Theory Summarized: The Adams’
Equity Theory is named for John Stacey Adams, a workplace and
behavioral psychologist, who developed this job motivation theory in
1963•Much like many of the more prevalent theories of motivation
(theories by Maslow's Hierarchy of Needs, Herzberg's Theory, etc.),
the Adams’ Equity Theory acknowledges that subtle and variable
factors affect an employee’s assessment and perception of their
relationship with their work and their employer•The theory is built-on
the belief that employees become de-motivated, both in relation to
their job and their employer, if they feel as though their inputs are
greater than the outputs•Employees can be expected to respond to
this is different ways, including de-motivation (generally to the extent
the employee perceives the disparity between the inputs and the
outputs exist), reduced effort, becoming disgruntled, or, in more
extreme cases, perhaps even disruptive•How to Apply the Adams'
Equity Theory:It is important to also consider the Adams’ Equity
Theory factors when striving to improve an employee's job
satisfaction, motivation level, etc., and what can be done to promote
higher levels of each.__________________________________
Great man theory: “The charismatic leader has extremely high
levels of self confidence, dominance, and strong conviction in the
normal righteousness of his/her beliefs, or at least the ability to
convince the followers that he/she possesses such confidence and
conviction ” Assumptions: Leaders in general, and great leaders in
particular, have some exceptional inborn leadership qualities which
are bestowed upon them by the divine power•These inborn qualities
are sufficient for a leader to be successful•Since these qualities are
inborn, these cannot be enhanced through education and
training•These leadership qualities make a leader effective and
situational factor do not have any influence.
Limitation:If we assume that there are certain inborn qualities of
great leader, it implies that nothing can be done to develop leader in
organization. But through training leaders can be developed•A
charismatic leader may fail in changed situation._____________
Trait theory:Trait is defined as relatively enduring quality of an
individual•The trait approach seeks determine ‘what makes a
successful leader from the leader’s own personal characteristic•Acc.
to George R terry, traits generally found associated with leadership
are mental and physical energy, emotional stability, knowledge of
human relations, empathy, objectivity, personal motivation,
communication skills, social & technical skills•Acc. To fayol, the leader
should have good health and physical fitness, intelligence and mental
vigor, moral qualities, knowledge and managerial ability.
Assumptions:People are born with inherited traits.Some traits are
particularly suited to leadership.People who make good leaders have
the right (or sufficient) combination of traits.
Description:Early research on leadership was based on the
psychological focus of the day, which was of people having inherited
characteristics or traits. Attention was thus put on discovering these
traits, often by studying successful leaders, but with the underlying
assumption that if other people could also be found with these traits,
then they, too, could also become great leaders.