Unit IV: Management of Business

Overview of functions of management and managerial roles in business;

Managerial levels, skills/competencies;
Decision-making techniques;
Motivation;
Leadership and Communication – exemplary practices in developing
people as individuals and teams.
Management has been described as a social process involving responsibility
for economical and effective planning & regulation of operation of an
enterprise in the fulfillment of given purposes.
It is a dynamic process consisting of various elements and activities.
These activities are different from operative functions like marketing, finance,
purchase etc. Rather these activities are common to each and every manger
irrespective of his level or status.

Different experts have classified functions of management. According to

George & Jerry, “There are four fundamental functions of management i.e.
planning, organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to

command, & to control”.
Whereas Luther Gullick has given a keyword ‘POSDCORB’ where P
stands for Planning, O for Organizing, S for Staffing, D for Directing, Co
for Co-ordination, R for reporting & B for Budgeting.
But the most widely accepted are functions of management given by
KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing,
Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of

management but practically these functions are overlapping in nature i.e.
they are highly inseparable. Each function blends into the other & each
affects the performance of others.
Planning
It is the basic function of management. It deals with chalking out a future
course of action & deciding in advance the most appropriate course of actions
for achievement of pre-determined goals. According to KOONTZ, “Planning is
deciding in advance - what to do, when to do & how to do. It bridges the gap
from where we are & where we want to be”. A plan is a future course of
actions. It is an exercise in problem solving & decision making. Planning is
determination of courses of action to achieve desired goals. Thus, planning is a
systematic thinking about ways & means for accomplishment of pre-
determined goals. Planning is necessary to ensure proper utilization of human
& non-human resources. It is all pervasive, it is an intellectual activity and it
also helps in avoiding confusion, uncertainties, risks, wastages etc.
Organizing
It is the process of bringing together physical, financial and human resources
and developing productive relationship amongst them for achievement of
organizational goals. According to Henry Fayol, “To organize a business is to
provide it with everything useful or its functioning i.e. raw material, tools,
capital and personnel’s”. To organize a business involves determining &
providing human and non-human resources to the organizational structure.
Organizing as a process involves:

• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
Staffing
It is the function of manning the organization structure and keeping it manned.
Staffing has assumed greater importance in the recent years due to advancement
of technology, increase in size of business, complexity of human behavior etc.
The main purpose o staffing is to put right man on right job i.e. square pegs in
square holes and round pegs in round holes. According to Kootz & O’Donell,
“Managerial function of staffing involves manning the organization structure
through proper and effective selection, appraisal & development of personnel to
fill the roles designed un the structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).
• Recruitment, Selection & Placement.
• Training & Development.
• Remuneration.
• Performance Appraisal.
• Promotions & Transfer.
Directing
It is that part of managerial function which actuates the organizational
methods to work efficiently for achievement of organizational purposes. It is
considered life-spark of the enterprise which sets it in motion the action of
people because planning, organizing and staffing are the mere preparations for
doing the work. Direction is that inert-personnel aspect of management which
deals directly with influencing, guiding, supervising, motivating sub-ordinate
for the achievement of organizational goals. Direction has following elements:
• Supervision
• Motivation
• Leadership
• Communication
• Supervision- implies overseeing the work of subordinates by their
superiors. It is the act of watching & directing work & workers.
• Motivation- means inspiring, stimulating or encouraging the sub-
ordinates with zeal to work. Positive, negative, monetary, non-monetary
incentives may be used for this purpose.
• Leadership- may be defined as a process by which manager guides and
influences the work of subordinates in desired direction.
• Communications- is the process of passing information, experience,
opinion etc. from one person to another. It is a bridge of understanding.
Controlling
It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling
is the measurement & correction of performance activities of subordinates in order to
make sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:
• Establishment of standard performance.
• Measurement of actual performance.
• Comparison of actual performance with the standards and finding out deviation if
any.
• Corrective action.
Managerial Roles
In carrying out the responsibilities of planning, organizing, leading, and controlling,
managers take on many different roles. A role is a set of behavioral expectations, or a
set of activities that a person is expected to perform.
Managers’ roles fall into three basic categories:
• Informational roles
• Interpersonal roles, and
• Decisional roles.
In an informational role, the manager may act as an information gatherer, an
information distributor, or a spokesperson for the company.
A manager’s interpersonal roles are based on various interactions with other people.
Depending on the situation, a manager may need to act as a figurehead, a company
leader, or a liaison.
When acting in a decisional role, a manager may have to think like an entrepreneur,
make decisions about resource allocation, help resolve conflicts, or negotiate
compromises.
In every function performed, role taken on, and set of skills applied, a
manager is a decision maker. Decision-making means choosing among
alternatives.
Decision-making occurs in response to the identification of a problem or
an opportunity. The decisions managers make fall into two basic
categories: programmed and nonprogrammed.
Programmed decisions are made in response to routine situations that
occur frequently in a variety of settings throughout an organization.
For example, the need to hire new personnel is a common situation for
most organizations. Therefore, standard procedures for recruitment and
selection are developed and followed in most companies.
Information Roles
Monitor
• Seeks out and gathers information relevant to the organization
• Finding out about legal restrictions on new product technology
Disseminator
• Provides information where it is needed in the organization
• Providing current production figures to workers on the assembly
line
Spokesperson
• Transmits information to people outside the organization
• Representing the company at a shareholders’ meeting
Interpersonal Roles

Figurehead
• Represents the company in a symbolic way
• Cutting the ribbon at ceremony for the opening of a new building

Leader
• Guides and motivates employees to achieve organizational goals
• Helping subordinates to set monthly performance goals

Liaison
• Acts as a go-between among individuals inside and outside the
organization
• Representing the retail sales division of the company at a regional sales
meeting
Decisional Roles
Entrepreneur
• Searches out new opportunities and initiates change
• Implementing a new production process using new technology

Disturbance handler
• Handles unexpected events and crises
• Handling a crisis situation such as a fire

Resource allocator
• Designates the use of financial, human, and other organizational resources
• Approving the funds necessary to purchase computer equipment and hire personnel

Negotiator
• Represents the company at negotiating processes
• Participating in salary negotiations with union representatives
MOTIVATION
Motivation is the basic psychological process. None would deny that it
is the most important process in the more micro approach to
organizational behavior.
Many people equate the causes of behavior with motivation.
Causes of behavior are much broader and more complex than can be
explained by motivation alone. Hence motivation should never be
under-rated.
Along with Perception, Personality and Learning, Motivation is a very
important process in understanding a behavior.
It must be remembered that, motivation should not be taken for granted
as the only explanation of behavior.
It acts and interacts in conjunction with other mediating process and the
environment.
It must also be remembered that like any other mediating processes or
environment, motivation cannot be seen. Motivation is invisible.
What all can be seen is the behavior. Motivation is the hypothetical
construct that is used to help explain behavior. Hence it should never be
equated with the behavior.
The meaning of motivation: - Today virtually, all including laymen and
scholars have their own definition of motivation, containing one or more of
the following terms: - Desires Wants, Wishes, Aims, Goals, Needs, Drives,
Motives and Incentives. Technically motivation can be traced to the Latin
word “Movere” that means ‘to move’.

Definition: - A motive is an inner state that energizes, actuates, activates or

moves (Hence motivation), that directs or channels the behavior towards
the goals
A motive is restlessness, a lack of you, a force. Once in grip of a motive
the organism does something.
It most generally does something to reduce the restlessness, to remedy
the lack, to alleviate to mitigate the force.
The key to understanding the motivation seems to lie in the meaning
and relationship between needs, drives and goals.
Basic motivation process sets-up drives to accomplish goals.
BASIC MOTIVATION PROCESS:
Needs: - The best one word definition of needs is ‘deficiency’. In the
homeostatic sense, needs are created whenever there is a physiological or
psychological imbalance. For example a need exists when a cell in the body is
deprived of food and water or the human personality is deprived of other
persons who serve as friends or companions. (hunger, thirst and company)

Drives: - With a few exceptions, drives or motives (These two terms shall be
used interchangeably), are set-up to alleviate needs. A drive can be simply
defined as a deficiency with direction. Drives are action oriented and provide
an energizing thrust toward goal accomplishment. They are at the very heart of
the motivational process. The examples of the needs for food and water are
translated into hunger and thirst drives and the need for friends becomes a
drive for affiliation.
Goals: - At the end of motivation cycle is the goal. A goal in the
motivation cycle can be defined as anything that will alleviate a need
and reduce it to the drive. Thus attaining a goal tends to restore
physiological and psychological balance and will reduce or cut-off the
drive.
Characteristics of Motivation-The salient features or Characteristics of
motivation are as follows:
Alignment of aims, purpose and values between staff, teams and organization
is the most fundamental aspect of motivation. The better the alignment and
personal association with organizational aims, the better the platform for
motivation. The manager plays the most important role in successful
employee motivation. Motivation is a complex area. It’s different for each
person.
What is motivation? It is a difficult question to answer despite so much of
interests shown by practitioners and researchers. The term motivation is
derived from the Latin word movers, meaning “to move.”
Motivation can be defined as the driving force behind our actions, fueled by
our desire for something. It is that internal strength that gets us to move, and
give 100% to whatever goal or end we desire or plan to achieve. From a
manager’s point of view motivation is the process to energies, direct and
sustain your subordinates’ efforts to attain the goals.
1. Motivation is a Psychological Concept:
Motivation has to come from within each individual. There are two
desiring factors in motivation-(a) Fundamental needs, such as food,
clothes and shelter and (b) Ego-satisfaction including self-esteem,
recognition from others, opportunities for achievements, self-
development and self actualization which act as powerful though
unconscious, motivator of behaviour. Inner motivation can be more
decisive for behaviour than any external influence.
2. Motivation affects the Whole Individual, not part of Him /Her:
A person’s basic needs determine to a great extent what he will try to do at
any given time. All these needs are inter-related because each individual is an
integrated organised whole.

3. Motivation is never an Unending Process:

Man is a social animal. As a social animal he has innumerable wants which
induce him to work. If one basic need is adequately satisfied for a given
individual it loses power as a motivator and does into determine his current
behaviour but at the same time others needs continue to emerge.
Wants are innumerable and cannot be satisfied at one time. It is an unending
process so the process of motivation is also unending to induce the person to
satisfy his innumerable wants. The importance of motivation is to keep it
alive and not to let it dwindle.
4. Non-fulfilment of Basic Needs Makes a Man Sick:
If anybody fails in trying to meet a need which he feels is essential for
him, he becomes to some extent mentally ill and such frustrated man
cannot be motivated any further until his essential need is satisfied.
5. Goals are Motivators:
Goals and motives are inseparable. Man works to achieve the goals. A
soon as the goal is achieved he would be no longer interested in work.
Therefore, it is very essential for the management to know his goal to
push him to work.
6. The Self-concept as a Unifying Force:
According to Geller-man unifying forces run through each individual’s
history. Unifying force means the drive to activate his/her image of him-
herself. The outline of a person’s self image is fairly well checked in
early childhood and thereafter does not act ordinarily change. Thus, two
things that individual is always trying to do are (a) to act like the person;
he thinks he is, and (b) to get what he thinks, he can.

7. Motivation is a complex phenomenon:

Motivation being an internal feeling cannot be observed directly. Since
motives themselves are dynamic, it further adds to complexity.
8. Motivation is different from Satisfaction, Inspiration, and
Manipulation:
Motivation refers to the drive and efforts to satisfy a want or goal,
whereas satisfaction refers to the contentment experienced when a want
is satisfied. In contrast, inspiration is bringing about a change in the
thinking pattern. On the other hand Manipulation is getting the things
done from others in a predetermined manner.
Importance/need of Motivation – With Factors
Motivation is the core of management. A team of highly qualified and
motivated employees is necessary for achieving the objectives of an
organization.
The importance of motivation may be judged on the basis of the
following factors:

1. Effective Use of Resources:

Motivation activates human resources and compels employees to behave
in a particular manner. In business, all physical resources need to be
used through human force. Highly motivated employees greatly help in
making optimum use of available resources.
2. Higher Efficiency of Employees:
Motivation is directly related to the level of efficiency. Motivated
employees put in their maximum effort for achieving organizational
goals. Motivation improves the work performance by bridging the gap
between the ability and willingness to work. Better performance results
in higher productivity and consequently lower cost of production.

3. Healthy Industrial Relation:

Motivation is considered as the backbone of good industrial relation.
Motivation creates friendly and supportive relationships between the
employer and the employees. When the industrial relation becomes
better, industrial disputes are reduced. There will be an atmosphere of
confidence between the employer and the employees.
4. Better Organizational Image:
Motivation helps in improving an image of the organization. Employees
produce more when they are properly motivated. Highly motivated
employees try to maintain a self- disciplined and productive internal
environment in the organization. This creates a better impression to the
outsiders dealing with the organization.

5. High Morale and Satisfaction:

Motivation is helpful in increasing the morale of employees. High
degree of motivation may lead to high morale. Highly motivated
employees will get higher satisfaction which may lead to higher
efficiency. Motivation improves the quantity as well as the quality of
production.
6. Reduced Labour Turnover and Absenteeism:
Motivation leads to job satisfaction of workers. Employees are punctual
and regular in their work schedule, provided they get job satisfaction.
Highly motivated employees are loyal and committed to the
organization. They are sincere and prefer to stay on the job for longer
period of time. As a result, labour absenteeism and turnover are low.

7. Accomplishment of Organizational Goals:

Motivation helps in shaping the working behaviour of the employees. It
channelizes energy of employees for achieving organizational goals.
Highly motivated employees are more committed and cooperative for
seeking organizational objectives. Motivation ensures achievement of
organizational goals by meeting individual needs through a satisfactory
system of rewards.
8. Introducing Changes in the Organization:
Motivation helps the management in introducing changes in the
organization. Normally, employees resist changes for fear of an adverse
effect on their employment. When the employees are given various
opportunities of development, they can easily adapt to new situations.
Motivated employees support all changes that are in the interest of the
organization.
Maslow’s Hierarchy of Needs

Abraham Maslow first introduced the concept of a hierarchy of needs in his 1943 paper
titled "A Theory of Human Motivation," and again in his subsequent book, Motivation and
Personality. This hierarchy suggests that people are motivated to fulfill basic needs before
moving on to other, more advanced needs.
As a humanist, Maslow believed that people have an inborn desire to be self-actualized,
that is, to be all they can be. To achieve this ultimate goal, however, a number of more
basic needs must be met. This includes the need for food, safety, love, and self-esteem.
Maslow believed that these needs are similar to instincts and play a major role in
motivating behavior. There are five different levels of Maslow’s hierarchy of needs,
starting at the lowest level known as physiological needs.
Physiological Needs
The physiological needs are fairly apparent and include the needs that
are vital to our survival. Some examples of physiological needs include:
• Food
• Water
• Breathing
In addition to the basic requirements of nutrition, air, and temperature
regulation, physiological needs also include such things as shelter and
clothing.
Security and Safety Needs
As we move up to the second level of Maslow’s hierarchy, the needs
start to become a bit more complex. At this level, the needs for security
and safety become primary.
People want control and order in their lives. So, the need for safety and
security contributes largely to behaviors at this level. Some of the basic
security and safety needs include:
• Financial security
• Health and wellness
• Safety against accidents and injury
Finding a job, obtaining health insurance and health care, contributing
money to a savings account, and moving into a safer neighborhood are
all examples of actions motivated by security and safety needs.
Social Needs
The social needs in Maslow’s hierarchy include such things as love, acceptance,
and belonging. At this level, the need for emotional relationships drives human
behavior. Some of the things that satisfy this need include:
• Friendships
• Romantic attachments
• Family
• Social groups
• Community groups
• Churches and religious organizations
In order to avoid problems such as loneliness, depression, and anxiety, it is
important for people to feel loved and accepted by others. Personal relationships
with friends, family, and lovers play an important role, as does involvement in
groups—such as religious groups, sports teams, book clubs, and other group
activities.
Esteem Needs
At the fourth level in Maslow’s hierarchy is the need for appreciation and respect.
Once the needs at the bottom three levels have been satisfied, the esteem needs
begin to play a more prominent role in motivating behavior.
At this level, it becomes increasingly important to gain the respect and appreciation
of others. People have a need to accomplish things, then have their efforts
recognized. In addition to the need for feelings of accomplishment and prestige,
esteem needs include such things as self-esteem and personal worth.
People need to sense that they are valued by others and feel that they are making a
contribution to the world. Participation in professional activities, academic
accomplishments, athletic or team participation, and personal hobbies can all play a
role in fulfilling the esteem needs.
People who are able to satisfy esteem needs by achieving good self-esteem and the
recognition of others tend to feel confident in their abilities. Conversely, those who
lack self-esteem and the respect of others can develop feelings of inferiority.
Self-Actualization Needs
At the very peak of Maslow’s hierarchy are the self-actualization needs.
Self-actualizing people are self-aware, concerned with personal growth,
less concerned with the opinions of others, and interested in fulfilling
their potential.
"What a man can be, he must be," Maslow explained, referring to the
need people have to achieve their full potential as human beings.
According to Maslow’s definition of self-actualization, "It may be
loosely described as the full use and exploitation of talents, capabilities,
potentialities, etc. Such people seem to be fulfilling themselves and to
be doing the best that they are capable of doing. They are people who
have developed or are developing to the full stature of which they
capable."
Incentives to Motivate Employees
1. Create an Aesthetically Pleasing Environment
Your business environment should be a pleasant place for employees to
work. The space should be comfortable, functional, organized and fun!
The atmosphere can greatly affect the motivation level and feeling that
all is well in the workplace.
2. Hire Supportive Managers
The mindset of a manager can impact how motivated their employees are.
Employees lead by example. If a manager lacks motivation, it is likely their
employees will follow in their footsteps. Employees thrive when they have a
respectful, honest, and supportive manager.
Employee and Manager One-on-Ones: Managers should not wait for semi-
annual or annual meetings to have meaningful conversations or to have a
touchpoint with their employees. If six to twelve months pass from the last
one-on-one meeting, employees may lose motivation in achieving team
goals or completing projects. Scheduling periodic one-on-one meetings will
consistently hold employees accountable and will improve communication
between the manager and the employee.
Transparency: Be transparent with your employees. Share business updates
and current projects with them on a regular basis so they feel included and
part of the team.
3. Provide Plenty of Educational Opportunities
Employees are appreciative and motivated when they have an
opportunity to grow within a company. By providing educational
opportunities, employees will have the opportunity to grow their skill-
set and expand their knowledge. This will motivate them to reach that
next step within the company and realize their full potential.

4. Give Feedback and Recognition

People feel fulfilled by recognition. When sharing feedback with
employees, make sure to recognize their exceptional work. This will
give them a deeper connection to the business. Seeing how their hard
work is recognized by others does have an impact on the company
culture.
5. Ensure Leadership Opportunities are Available
Leadership does not always mean a promotion or an increase in salary.
Employees can gain leadership opportunities by securing the lead position on
various team projects, which gives them more ownership of their work. When
you give employees the opportunity to do something bigger within the
company, they will naturally rise to the occasion and embrace the leadership
role. If you notice an employee is starting to feel restless in their current role,
ask what else interests them. Perhaps two team members that have been doing
the same responsibilities for a while would be excited to swap some of their
tasks.

6. Implement an Employee Rewards and Incentive Program

Employees will do more when they are rewarded for doing good work. Even
small rewards can make a big difference. If your business wants to reward
employees by offering incentives, the incentives will need to provide value to
employees. Ask employees what they want. Find out what is important to
them. Incentives that are important will be the greatest motivator. This could
be anything from a prime parking spot to additional PTO days.
7. Promote a Company Culture that Values Work-Life Balance

Allowing employees to have a work-life balance is crucial to employee

motivation. Employees will be left feeling unmotivated and less
productive when they feel overwhelmed or burned out. Consider
offering flexible (flex) scheduling to employees so they have control
over their own schedule to meet their personal needs. Feeling pressured
to work long hours week after week will leave employees feeling more
stressed, less motivated, and absent from their work over time.
Herzberg’s Two-Factor Theory
American psychologist Frederick Herzberg is regarded as one of the
great original thinkers in management and motivational theory.
Herzberg set out to determine the effect of attitude on motivation, by
simply asking people to describe the times when they felt really good,
and really bad, about their jobs.
What he found was that people who felt good about their jobs gave very
different responses from the people who felt bad.
The results from this inquiry form the basis of Herzberg’s Motivation-
Hygiene Theory (sometimes known as Herzberg’s “Two Factor Theory”).
Published in his famous article, “One More Time: How do You Motivate
Employees,” the conclusions he drew were extraordinarily influential, and
still form the bedrock of good motivational practice nearly half a century
later.
He’s especially recognized for his two-factor theory, which hypothesized
that are two different sets of factors governing job satisfaction and job
dissatisfaction: “hygiene factors,” or extrinsic motivators and “motivation
factors,” or intrinsic motivators.
Hygiene factors, or extrinsic motivators, tend to represent more
tangible, basic needs—i.e., the kinds of needs included in the existence
category of needs in the ERG theory or in the lower levels of Maslow’s
hierarchy of needs.
Extrinsic motivators include status, job security, salary, and fringe
benefits. It’s important for managers to realize that not providing the
appropriate and expected extrinsic motivators will sow dissatisfaction
and decrease motivation among employees.
Motivation factors, or intrinsic motivators, tend to represent less
tangible, more emotional needs—i.e., the kinds of needs identified in the
“existence”, “relatedness” and “growth” categories of needs in the ERG
theory and in the higher levels of Maslow’s hierarchy of needs.
Intrinsic motivators include challenging work, recognition, relationships,
and growth potential. Managers need to recognize that while these needs
may fall outside the more traditional scope of what a workplace ought to
provide, they can be critical to strong individual and team performance.
According to Herzberg, intrinsic motivators and extrinsic motivators
have an inverse relationship. That is, intrinsic motivators tend to
increase motivation when they are present, while extrinsic motivators
tend to reduce motivation when they are absent. This is due to
employees’ expectations.
Extrinsic motivators (e.g., salary, benefits) are expected, so they won’t
increase motivation when they are in place, but they will cause
dissatisfaction when they are missing.
Intrinsic motivators (e.g., challenging work, growth potential), on the
other hand, can be a source of additional motivation when they are
available.
If management wants to increase employees’ job satisfaction, they
should be concerned with the nature of the work itself—the
opportunities it presents employees for gaining status, assuming
responsibility, and achieving self-realization.
If, on the other hand, management wishes to reduce dissatisfaction, then
it must focus on the job environment—policies, procedures, supervision,
and working conditions. To ensure a satisfied and productive workforce,
managers must pay attention to both sets of job factors.
Leadership
Leadership is the process by which an individual mobilizes people and
resources to achieve a goal. It requires both a set of skills that can be learned
as well as certain attributes that can be nurtured.
Leaders inspire, challenge, and encourage others. They can persuade and
influence, and they show resilience and persistence.
All aspects of society have leaders. The concept of leader may call to mind a
CEO, a prime minister, a general, a sports team captain, or a school
principal; examples of leadership exist across a variety of organizations.
Leaders motivate others to aspire to achieve and help them to do so. They
focus on the big picture with a vision of what could be and help others to
see that future and believe it is possible. In this way, leaders seek to bring
about substantive changes in their teams, organizations, and societies.

Leadership is a relationship between followers and those who inspire them

and provide direction for their efforts and commitments. It affects how
people think and feel about their work and how it contributes to a larger
whole.
Effective leaders can mean the difference between increasing a team’s
ability to perform or diminishing its performance, between keeping efforts
on track or encountering disaster, and even between success or failure.
Leadership is a vital management function that helps to direct an
organization's resources for improved efficiency and the achievement of
goals.
Effective leaders provide clarity of purpose, motivate and guide the
organization to realize its mission. Regardless of your position,
understanding the role of leaders can help you contribute more
meaningfully to the accomplishment of your company's objectives.
Why is leadership important?
Leadership is important for the success of an organization because it
provides guidance, purpose and helps others understand the long-term
strategies and goals of a business.
1. Vision
Successful leadership creates a clear vision of what the organization can
achieve. Leaders provide a roadmap outlining the steps and resources their
company needs to arrive at the preferred destination.

2. Communication
Leaders help to communicate the vision and mission of the firm to
employees. This provides direction and helps everybody identify the roles
that best fit skills and experiences. Through clear communication, leaders
encourage their subordinates to act for the actualization of objectives.
3. Decision Making
Decision making is one of the top leadership skills. Successful
leadership takes the best decision for the organization in all situations.
Leaders are experts at taking the right decisions based on the prevailing
circumstances. They weigh their organization's strengths and
weaknesses to ensure that their choices put them at an advantage now
and in the future.

4. Passion
Leaders are passionate about their vision and infect others with their
energy to achieve it. Effective leadership inspires others to buy into the
company's objectives and provide a powerful reason for everybody to
remain dedicated to their duties.
5. Guidance
Once employees know what to do to deliver on projects, effective
leaders oversee their work to ensure they perform their roles effectively.
Leaders make sure employee efforts align with organizational goals for
improved efficiency.

6. Commitment
Effective leaders are committed to the success of their organization and
its employees. They remain focused on the company's long-term goals
and do not allow temporary setbacks to dampen their spirits. When they
face a setback, good leaders motivate their teams and help them see
beyond the problems preventing them from reaching the common goal.
7. Integrity
Successful leadership teaches the organization ethical values.
Regardless of their problems, successful leaders do the right things to
achieve their goals. For them, integrity, truthfulness and fairness are
core attributes they want to see in their company and its relations with
contractors and clients.

8. Confidence
Leaders help subordinates to excel at their work and every aspect of life
by expressing confidence in their abilities. They listen to employees'
worries about their work, provide positive feedback and ensure the
office environment brings out the best in them.
9. Morale
Leadership boosts staff morale by winning their trust. It assures employees of the
leader's confidence in their abilities to deliver on the vision and mission of the
organization. High morale among employees reduces distraction and motivates
them to devote their energies to achieve organizational goals.

10. Growth
The best leaders create an environment where others can grow. They are open to
new ideas and methods of achieving results and are flexible enough to admit their
mistakes. Successful leaders encourage subordinates to provide inputs on how to
improve work processes and reward excellence to increase creativity and loyalty.

11. Coordination
Effective leadership balances personal interests with organizational objectives.
Leaders know that employees have personal reasons for working with their
company. They create an environment where the organization can achieve its goals
without sacrificing employee satisfaction.
Exemplary Practice
• Model the Way
Leaders establish principles concerning the way people (constituents,
peers, colleagues, and customers alike) should be treated and the way
they should pursue goals. Leaders create standards of excellence and set
an example for others to follow. They put up signposts when people feel
unsure of where to go or how to get there. Leaders create opportunities
for victory
Inspire a Shared Vision
Leaders passionately believe they can make a difference. They envision the
future and create an ideal and unique image of what the organization can
become. Through their magnetism and persuasion, leaders enlist others in their
dreams. They breathe life into their visions and get people to see exciting
possibilities for the future.
Challenge the Process
Leaders search for opportunities to change the status quo. They look for
innovative ways to improve the organization. In doing so, they experiment and
take risks. Since complex change threatens to overwhelm people and stifle
action, leaders set interim goals so that people can achieve small wins as they
work toward larger objectives. Effective leaders unravel bureaucracy when it
impedes action. And, because leaders know that taking risks involves mistakes
and failures, they accept occasional disappointments as opportunities to learn.
Enable Others to Act
Leaders foster collaboration and build spirited teams. They actively
involve others. Leaders understand that mutual respect sustains
extraordinary efforts. They strive to create an atmosphere of trust and
human dignity. They strengthen others, making each person feel capable
and powerful.
Encourage the Heart
Accomplishing extraordinary things in organizations is hard work. To
keep hope and determination alive, leaders recognize the contributions
that individuals make. In every winning team, the members need to
share in the rewards of their efforts, so leaders celebrate
accomplishments. They make people feel like heroes.
 Decision Making Process and Techniques
The word ‘decides’ means to come to a conclusion or resolution as to
what one is expected to do at some later time.
According to Manely H. Jones, “It is a solution selected after examining
several alternatives chosen because the decider foresees that the course
of action he selects will do more than the others to further his goals and
will be accompanied by the fewest possible objectionable
consequences”.
Decision is a choice whereby a person comes to a conclusion about
given circumstances/ situation.
It represents a course of behaviour or action about what one is expected
to do or not to do.
Decision- making may, therefore, be defined as a selection of one course
of action from two or more alternative courses of action.
Thus, it involves a choice-making activity and the choice determines our
action or inaction.
Definition of Decision-Making:
Some of the important definitions of decision-making are given as under.
Decision-making is the selection based on some criteria from two or more
possible alternatives. -George R.Terry

A decision can be defined as a course of action consciously chosen from

available alternatives for the purpose of desired result-J.L. Massie

A decision is an act of choice, wherein an executive forms a conclusion

about what must be done in a given situation. A decision represents a
course of behaviour chosen from a number of possible alternatives. -D.E.
Mc. Farland
Following elements can be derived from the above mentioned definitions:
1. Decision–making is a selection process and is concerned with selecting
the best type of alternative.
2. The decision taken is aimed at achieving the organisational goals.
3. It is concerned with the detailed study of the available alternatives for
finding the best possible alternative.
4. Decision making is a mental process. It is the outline of constant
thoughtful consideration.
5. It leads to commitment. The commitment depends upon the nature of the
decision whether short term or long term.
 Types of Decisions

Decision-making is one of the core functions of management.

And it is actually a very scientific function with a well-defined decision-

making process.

There are various types of decisions the managers have to take in the
day to day functioning of the firm.

Let us take a look at some of the types of decisions

Strategic Decisions and Routine Decisions
As the name suggests, routine decisions are those that the manager
makes in the daily functioning of the organization, i.e. they are routine.
Such decisions do not require a lot of evaluation, analysis or in-depth
study. In fact, high-level managers usually delegate these decisions to
their subordinates.
On the other hand, strategic decisions are the important decisions of the
firm. These are usually taken by upper and middle-level management.
They usually relate to the policies of the firm or the strategic plan for
the future.
Hence such decisions require analysis and careful study. Because
strategic decisions taken at this level will affect the routine decisions
taken daily.
Programmed Decisions and Non-Programmed Decisions
Programmed decisions relate to those functions that are repetitive in
nature. These decisions are dealt with by following a specific standard
procedure. These decisions are usually taken by lower management.
For example, granting leave to employees, purchasing spare parts etc.
are programmed decisions where a specific procedure is followed.
Non-programmed decisions arise out of unstructured problems, i.e.
these are not routine or daily occurrences. So there is no standard
procedure or process to deal with such issues.
Usually, these decisions are important to the organization. Such
decisions are left to upper management. For example, opening a new
branch office will be a non-programmed decision.
Policy Decisions and Operating Decisions
Tactical decisions pertaining to the policy and planning of the firm are known as
policy decisions. Such decisions are usually reserved for the firm’s top
management officials.
They have a long term impact on the firm and require a great deal of analysis.
Operating decisions are the decisions necessary to put the policy decisions into
action.
These decisions help implement the plans and policies taken by the high-level
managers.
Such decisions are usually taken by middle and lower management. Say the
company announces a bonus issue. This is a policy decision. However, the
calculation and implementation of such bonus issue is an operating decision.
Organizational Decisions and Personal Decisions
When an executive takes a decision in an official capacity, on behalf of
the organization, this is an organizational decision. Such decisions can
be delegated to subordinates.
However, if the executive takes a decision in a personal capacity, that
does not relate to the organization in any way this is a personal decision.
Obviously, these decisions cannot be delegated.
Individual Decisions and Group Decisions
When talking about types of decisions, let us see individual and group
decisions. Any decision taken by an individual in an official capacity it
is an individual decision.
Organizations that are smaller and have an autocratic style of
management rely on such decisions.
Group decisions are taken by a group or a collective of the firm’s
employees and management. For example, decisions taken by the board
of directors are a group decision.
Steps of Decision Making Process
Decision making is one of the most basic yet significant management skills for all of
us to have. And it can differ from person to person. Making decisions that are based
on careful analysis of numerous circumstances especially in a timely manner is
critical.
Therefore, it shouldn’t be procrastinated or taken in haste.
Making decisions can be hard, especially when the odds are not in your favor.

Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one
should ask when it comes to identifying the purpose of the decision.
• What exactly is the problem?
• Why the problem should be solved?
• Who are the affected parties of the problem?
• Does the problem have a deadline or a specific time-line?
Step 2: Information gathering
A problem of an organization will have many stakeholders. In addition, there
can be dozens of factors involved and affected by the problem. In the process
of solving the problem, you will have to gather as much as information related
to the factors and stakeholders involved in the problem. For the process of
information gathering, tools such as 'Check Sheets' can be effectively used.

Step 3: Principles for judging the alternatives

In this step, the baseline criteria for judging the alternatives should be set up.
When it comes to defining the criteria, organizational goals as well as the
corporate culture should be taken into consideration. As an example, profit is
one of the main concerns in every decision making process. Companies
usually do not make decisions that reduce profits, unless it is an exceptional
case. Likewise, baseline principles should be identified related to the problem
in hand.
Step 4: Brainstorm and analyse the different choices
For this step, brainstorming to list down all the ideas is the best option.
Before the idea generation step, it is vital to understand the causes of the
problem and prioritization of causes. For this, you can make use of Cause-
and-Effect diagrams and Pareto Chart tool. Cause and-Effect diagram helps
you to identify all possible causes of the problem and Pareto chart helps you
to prioritize and identify the causes with highest effect. Then, you can move
on generating all possible solutions (alternatives) for the problem in hand.

Step 5: Evaluation of alternatives

Use your judgement principles and decision-making criteria to evaluate each
alternative. In this step, experience and effectiveness of the judgement
principles come into play. You need to compare each alternative for their
positives and negatives.
Step 6: Select the best alternative
Once you go through from Step 1 to Step 5, this step is easy. In addition, the
selection of the best alternative is an informed decision since you have already
followed a methodology to derive and select the best alternative.

Step 7: Execute the decision

Convert your decision into a plan or a sequence of activities. Execute your plan
by yourself or with the help of subordinates.

Step 8: Evaluate the results

Evaluate the outcome of your decision. See whether there is anything you
should learn and then correct in future decision making. This is one of the best
practices that will improve your decision-making skills.
Group decision making Techniques
Brainstorming
Brainstorming technique involves a group of people, usually between five
and ten, sitting around a table in a classroom setting generating ideas in the
form of free association. The primary focus of the brainstorming technique
is more on ‘generation of ideas’, rather than on ‘evaluation of ideas’, the
idea being that if a large number of ideas can be generated, then it is likely
that there will be a unique and creative solution among them.
All these ideas are written on the blackboard with a piece of chalk so that
everybody can see every idea and try to improve upon them. The leader of
the group defines and explains the nature of the problem to the group
members and the rules to be followed.
a. No judgements are to be made on these ideas when they are generated. No
idea is to be criticized or evaluated in any way until all ideas have been
considered.
b. Welcome wild ideas, no matter how absurd they might seem. Some of the
wildest ideas have resulted in unique solutions. There should be no
inhibition in generating any ideas. The ideas that are too wild and
unfeasible can always be discarded later.
c. Strive for quantity and not quality. Quality can always be judged at the end.
The more ideas there are, the better the chances that the best solution will
not escape.
d. Each participant is encouraged to improve or modify other participant’s
suggestions. The system can make improvements on the ideas, not
visualized by the participant who originally suggested them. This process
results in free association and unrestricted thinking and may generate some
novel idea which may not have been thought of originally.
Delphi Technique
Delphi technique is a modification of brainstorming technique that it involves
obtaining the opinions of experts physically separated from each other and
unknown to each other.
Generally, the problems handled by this technique are not specific in nature or
related to a particular situation at a given time.
The process is more involved in predicting and assessing the impact on our society
of nature events in a given area.
For example, the Delphi technique may be used to understand the problems that
could be created in the event of a war and after. Typically, a group of experts is
assembled whose specialty lies in a given field and they are asked to give their
opinions about a problem or situation that might develop.
For example, physicians would be used to get ideas on how to treat a particular
disease such as AIDS and medical psychologists will be used to deal with family
of a patient of terminal disease or who is in a coma. All these opinions are handled
by a central coordinator, who consolidates these opinions and this summarized
information is sent back to the experts again for further analysis and opinion
refinement.
The following sequential steps characterize the technique
a. The problem is identified and set of questions is built relating to the problem so
that the answer to these questions generates solutions to the problem. These
questions are consolidated in the form of a questionnaire.
b. Experts in the problem area are identified and contacted. The questionnaire is sent
to each member who anonymously and independently answers the questions and
sends it back to the central coordinator.
c. Once received, the results of this questionnaire are compiled and analyzed and on
the basis of the responses received, a second questionnaire is developed which is
mailed back to the participating members.
d. The members are asked again to react to these responses and to comment, suggest,
evaluate and answer the new questions, possibly generating some new ideas and
solutions.
e. The responses to this second questionnaire are compiled and analyzed by the
central coordinator and if a consensus has not been reached, then a third
questionnaire is developed, pinpointing the issue and unresolved areas of concern.
f. The above process is repeated until a consensus is obtained. Then final report is
prepared and a solution is defined and developed if possible
Fish bowling
Fish bowling is another variation of the brainstorming but is more structured
and is to the point. In this technique, the decision-making group of experts is
seated around a circle with a single chair in the center of the circle. One
member of the group or the group leader is invited to sit in the center chair and
give his view about the problem and his proposition of a solution.
The other group members can ask him questions but there is no irrelevant
discussion or cross talk. Once the member in the center chair has finished
talking and his viewpoint is fully understood, he leaves the center and joins the
group in the circle. Then the second member is called upon to sit in the center
chair and give his views in the light of the views expressed earlier.
Possibility Ranking
Possibility ranking means determining the best option through using a
voting system or creating a list as a team to prioritize ideas and approaches.
When you’re trying to make a collective decision about a question or issue
that has many different potential outcomes, this can be a great group
decision-making technique to engage. This technique can be used in an
email, in a survey, or in your live meeting. You can begin with asking
everyone to make a personal list of how they might rank different options
or approaches and then combine lists to see if there are common opinions
amongst the group so that you can come to a consensus. After you
determine the average of the best option, you can take that approach
knowing that the majority support it and agree with it.