Directing

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 What is Directing?
• Directing or leading is defined as the process of influencing people
so that they will contribute to organizational and group goals.
• Directing consists of process or technique by which instruction can
be issued and operations can be carried out as originally planned.
• Directing is said to be the heart of management process. Planning, 
organizing, staffing have got no importance if direction function
does not take place.

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 Process of directing

1. Providing effective leadership

2. Integrating people and tasks and convincing them to assist in the

achievement of overall objectives

3. Effective communication

4. Providing climate for subordinates’ development

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 Leadership
Leadership is the ability to develop a vision that motivates others to
move with a passion toward a common goal. So leadership is a process
by which a person influences others to accomplish an objective and
directs the organization in a way that makes it more cohesive and
coherent

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Definition
Leadership is the “process of social influence in which one person can
enlist the aid and support of others in the accomplishment of a
common task”

- M Chemers

"Leadership is ultimately about creating a way for people to contribute

to making something extraordinary happen“

- Alan Keith
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Principles of Management 6
Factors of Leadership (Cont.)
• Leader - You must have an honest understanding of who you are,
what you know and what you can do. To be successful you have to
convince your followers not your superiors, that you are worthy of
being followed

• Follower -You must know your leader. The fundamental starting point
is having a good understanding of human nature, such as needs,
emotions and motivation
Principles of Management 7
 Factors of Leadership (Cont.)
• Communication-The nonverbal communication is leading. E.g.- when
you set example that communicates to your people that you would
not ask them to perform anything that you would not be willing to do.
Bad communication harm the relation between leader and employee
• Situation-We must use our judgment to decide the best course of
action and the leadership style needed for each situation. What we do
in one situation will not always work in another

Principles of Management 8
 Importance of Leadership
• Initiates action : Leader communicates the policies and plans to the
subordinates from where the work actually starts
• Motivation : A leader motivates the employees with economic and non-
economic rewards and thereby gets the work from the subordinates
• Providing guidance : A leader guides by instructing the subordinates the way
they have to perform their work effectively and efficiently
• Creating confidence : Confidence is an important factor which can be
achieved through expressing the work efforts to the subordinates, explaining
them clearly their role and giving them guidelines to achieve the goals
effectively. It is also important to hear the employees with regards to their
complaints and problems

Principles of Management 9
 Importance of Leadership (Cont.)
• Building morale : A leader can be a morale booster by achieving full
co-operation so that they perform with best of their abilities as they
work to achieve goals
• Builds work environment : Management is getting things done from
people. An efficient work environment helps in sound and stable
growth. He should listen to his subordinates problems and solve them
• Co-ordination : Co-ordination can be achieved through reconciling
personal interests with organizational goals. This synchronization can
be achieved through proper and effective co-ordination which should
be primary motive of a leader

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Leadership Theories

• Trait Approach

• Charismatic Approach

• Behavioral Approach

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 Trait approaches to leadership
Ralph M. Stogdill found that various researchers had identified specific
traits related to leadership ability –
1. Physical traits (such as energy, appearance and height)
2. Intelligence and ability traits
3. Personality traits (such as adaptability, aggressiveness, enthusiasm
and self-confidence)
4. Task-related characteristics (such as achievement, drive, persistence
and initiative)
5. Social characteristics (such as cooperativeness, interpersonal skills
and administrative ability)
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 Trait approaches to leadership (Cont.)

More recently, the following leadership traits have been identified –

1. Drive (including achievement, motivation, energy, ambition,
initiative and tenacity)
2. Leadership motivation (the aspiration to lead but not to seek power
as such)
3. Honesty and integrity
4. Self-confidence (including emotional stability)
5. Cognitive ability
6. Understanding of the business
Principles of Management 13
 Drawbacks of Trait approaches to leadership
• In general, the study of leaders’ traits has not been a very fruitful
approach to explaining leadership.
• Not all leaders possess all the traits, and many nonleaders may possess
most or all of them. Also, the trait approach gives no guidance as to how
much of any trait a person should have.
• Furthermore, the dozens of studies that have been made do not agree as
to which traits are leadership traits or what their relationships are to
actual instances of leadership.
• Most of these so-called traits are really patterns of behavior.

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 Charismatic leadership approach
• According to charismatic leadership theory, followers make attributions
of heroic or extraordinary leadership abilities when they observe certain
behaviors
• The characteristics of the charismatic leader are –
1. They are self-confident
2. They are willing to take risks to achieve that vision
3. They are sensitive to both environmental constraints and follower
needs
4. Demonstrating enthusiasm and excitement, and being in touch with
reality

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Charismatic leadership approach (Cont.)

How do charismatic leaders actually influence followers?

Research indicates that it is a four-step process
1. It begins by the leader articulating an appealing vision. This vision
provides a sense of continuity for followers by linking the present
with a better future for the organization
2. The leader then communicates high performance expectations and
expresses confidence that followers can attain them. This enhances
follower self-esteem and self-confidence

Principles of Management 16
 Charismatic leadership approach (Cont.)

3. Next, the leader conveys (through words and actions), a new set of
values and by his or her behavior, sets an example for followers to
imitate
4. Finally, the charismatic leader makes self-sacrifices and engages in
unconventional behavior to demonstrate courage and convictions
about the vision

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Leadership behavior and styles
Three theories are discussed here related to leadership behavior and
styles

They are –
1. Styles based on use of authority
2. The managerial grid
3. Leadership as a continuum

Principles of Management 18
 Leadership behavior and styles (Cont.)
1. Styles based on use of authority - leaders are seen applying three basic styles
• The autocratic leader commands and expects compliance, is dogmatic and
positive, and leads by the ability to withhold or give rewards and punishments.
• A manager may be highly autocratic in an emergency

Principles of Management 19
 Leadership behavior and styles (Cont.)
The democratic or participative leader consults with subordinates on
proposed actions and decisions and encourages participation from them.
This type of leader ranges from the person who does not take action
without subordinates’ concurrence to the one who makes decisions but
consults with subordinates before doing so

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 Leadership behavior and styles (Cont.)

The free-rein leader uses his or her power very little, if at all, giving
subordinates a high degree of independence in their operations

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 Leadership behavior and styles (Cont.)
• There are variations within this simple classification of leadership
styles
• Some leaders are seen as “benevolent autocrats”
• Benevolent Autocrats - although they listen considerately to their
followers’ opinions before making a decision, the decision is their own

Principles of Management 22
 Leadership behavior and styles (Cont.)

2. The managerial grid

• It is a 9 x 9 matrix
outlining 81 different
leadership styles. It was
developed by Robert
Blake and Jane Mouton
• The grid has 2 dimensions
– concern for people and
concern for production

Principles of Management 23
 Leadership behavior and styles (Cont.)
3. Leadership as a continuum
• The leadership continuum concept was developed by Robert Tannenbaum and
Warren H. Schmidt
• They see leadership as involving a variety of styles ranging from one that is highly
boss-centered to one that is highly subordinate-centered
• The styles vary with the degree of freedom a leader or manager grants to
subordinates
• Thus, instead of suggesting a choice between the two styles of leadership –
authoritarian or democratic – this approach offers a range of styles with no
suggestion that one is always right and another is always wrong
• The continuum theory recognizes that the appropriate style of leadership depends
on the leader, the followers and the situation

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Principles of Management 25
The path-goal approach to leadership effectiveness

• This theory was developed by Robert House

• The path-goal theory suggests that the main function of the leader is
to clarify and set goals with subordinates, help them find the best
path for achieving the goals and remove obstacles
• The term path-goal is derived from the belief that effective leaders
clarify the path to help their followers get from where they are to the
achievement of their work goals and to make the journey along the
path easier by reducing roadblocks

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The path-goal approach to leadership effectiveness

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The path-goal approach to leadership effectiveness
(Cont.)
• Robert House identified four leadership behaviors
1. The directive leader lets followers know what is expected of them,
schedules work to be done and gives specific guidance as to how to
accomplish tasks
2. The supportive leader is friendly and shows concern for the needs
of followers
3. The participative leader consults with followers and uses their
suggestions before making a decision
4. The achievement-oriented leader sets challenging goals and expects
followers to perform at their highest level
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Principles of Management 29
 What is Motivation ?
The processes that account for an individual’s intensity, direction and
persistence of effort toward attaining a goal
The processes that account for an individual’s willingness to exert
high levels of effort to reach organizational goals, conditioned by the
effort’s ability to satisfy some individual need
• Intensity – how hard a person tries
• Direction – effort that is channeled toward and consistent with
organizational goals
• Persistence – how long a person can maintain effort
Principles of Management 30
 McGregor’s Theory X and Theory Y
• McGregor’s Theory X and Theory Y Two sets of assumptions about the
nature of people.
• Theory X
• Average human beings have an inherent dislike of work and will avoid it if
they can
• Because of this human nature of disliking work, people must be coerced,
controlled, directed, and threatened with punishment to get them to put
forth adequate effort toward the achievement of organizational
objectives
• Average human beings prefer to be directed, wish to avoid responsibility,
have relatively little ambition, and want security above everything else
Principles of Management 31
 McGregor’s Theory Y
• The expenditure of physical and mental effort in work is natural as play or rest
• External control and threat of punishment are not the only means for producing effort
towards organizational objectives. People will exercise self-direction in the service of
objectives to which they are committed
• The degree of commitment to objectives is in proportion to the size of rewards associated
with their achievement
• Average human being learn, under proper conditions, not only to accept responsibility but
also to seek it
• The capacity to exercise a relatively high degree of imagination and creativity in the solution
of organizational problems is widely, distributed in the population
• Under the conditions of modern industrial life, the intellectual potentialities of the average
human being are partially utilized

Principles of Management 32
 Maslow’s Hierarchy of Needs Theory
This theory was propounded by Abraham Harold Maslow. It is most simple and
widely accepted theory

• Wants of human beings are unlimited. As soon as one want is satisfied

another want come in its place
• Only needs which are not yet satisfied influence human behavior. So an
unsatisfied need as a motivator

Principles of Management 33
 Maslow’s Hierarchy of Needs Theory
• Needs were categorized as five levels of lower to higher-order needs
• Individuals must satisfy lower-order needs before they can satisfy
higher order needs
• Satisfied needs will no longer motivate
• Motivating a person depends on knowing at what level that person is
on the hierarchy
Hierarchy of needs
• Lower-order (external): physiological, safety
• Higher-order (internal): social, esteem, self-actualization

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Maslow’s Hierarchy of Needs Theory

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• Physiological needs – These are those needs which are very important for
the survival and preservation of life. Example Food, Water, Shelter, air,
sleep, clothing
• Safety needs – It includes protection from physical harm, health, economic
disaster, Job security etc
• Social Needs – An individual who motivated in this level wants to receive or
give affection or love with others. These needs mainly include the need for
conversation , sociability, exchange of feelings and grievances, Recognition
and belongingness
Principles of Management 36
Esteem Needs
• He classified esteem need into two (a) Self esteem (b) Public esteem.
• Self esteem means esteem in the eyes of self, that is a person feels that he is doing something worth
while.
• It include desire for competence, Personal strength, Adequacy, achievements, independence and
freedom.
• Public esteem or esteem from others includes prestige, Recognition and appreciation

Self Actualization needs

• Self Actualization is the desire to become everything that one is capable of becoming.
• The person who has achieved the highest level presses towards full use and exploitation of his talents,
capacities, capabilities, and potentialities.
• It is the persons desire to reach the peak of ones potential
Principles of Management 37
Alderfer’s ERG Theory

• Existence needs

Physiological

• Relatedness needs

How one individual relates to his/her social environment

• Growth needs

Achievement and self actualization

Principles of Management 38
 Herzberg’s Motivation- Hygiene Theory
Frederick Herzberg has tried to modify Maslow's need hierarchy theory, His theory is also
known as Two factor theory or Hygiene theory. He said that there are certain satisfiers and
dissatisfiers for employees at work. According to him people have two different categories of
needs.
They are :
Hygiene factors
Motivating factors
These two categories were independent of each other and also affected behaviour in different
ways.

Principles of Management 39
Hygiene factors
When people are dissatisfied with their jobs, they blame the environment in which they are
working. These are hygiene factors and they are an extrinsic part of the job. Presence of
hygiene factors cannot motivate workers. But the absence of hygiene factors can
demotivate people. Examples of hygiene factors are security, status, relationship with
subordinates, personal life, salary, work conditions, relationship with supervisor and
company policy and administration etc.

Principles of Management 40
Motivating factors
When people feel good about their jobs, this feeling has to do with the work itself. These are
motivating factors and they are an intrinsic part of the job. Presence of motivating factors
can motivate people. But the absence of motivating factors cannot demotivate the workers.
Examples of motivational factors are growth prospects, job advancement,
responsibility, challenges, recognition and achievements.

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Principles of Management 42
 Equity Theory

• Employees make comparison of their job inputs and outcomes relative to those
of others

• Equity Theory: Motivation is influenced by an individual’s subjective judgment

about the fairness of the reward he or she gets, relative to the inputs (which
include many factors, such as effort, experience, and education), in comparison
with the rewards of others,

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 Equity Theory
• Employees make comparison of their job inputs and outcomes relative
to those of others:

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Equity Theory

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Controlling

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 Controlling
• The managerial function of controlling is the measurement and
correction of performance in order to make sure that enterprise
objectives and the plans devised to attain them are being
accomplished

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Management process – planning

Relationship of Planning and

Functions of Management
Controlling: Plans furnish the
Process
standards of control
 THE BASIC CONTROL PROCESS

• Control techniques and systems are essentially the same for controlling
cash, office procedures, morale, product quality, and anything else.

• The basic control process, wherever it is found and whatever is being

controlled, involves three steps:
(1) establishing standards

(2) measuring performance against these standards

(3) correcting variations from standards and plans.

 Establishing standards of performance

Measurement of actual performance

Comparison of actual performance with standards

Analyzing deviation

Taking corrective action

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1. Establishing standard of performance
The first step in the process of control is to set a standard for performance. Standards are
determined on the basis of objectives to be attained. Standards serve as benchmarks towards
which an organization strives to work. It is the criterion against which actual performance can
be compared. Generally standard is expressed in terms of quality, quantity, cost and Time.
The standards should be simple, attainable, definite, reasonable, quantitative, and flexible.

Principles of Management 51
2. Measurement of actual performance
• Once performance standards are set, the next step is measurement of actual performance.
• It is the assessment of output both quantitatively and qualitatively, There are several
techniques for measurement of performance.
• These include personal observation. Sample checking, performance report etc.
• As far as possible performance should be measured in the same units in which standards are
set as this would make their comparison easier.

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 CRITICAL POINT CONTROL
It is neither economical nor easy to keep a check on each and every activity in an
organization. Control should, therefore focus a key result areas(KRA) which are critical to
the success of an organization. These are set as critical points. If anything get wrong at the
critical points the entire organization suffers.

Principles of Management 53
 Critical Point Standards

• A manager control through careful personal observation of the work being done

• In most cases personal observation of every work is not practically possible because of the
complexity of the operations

• So a manager choose some points and observe them carefully

• The selected points should be critical enough to evaluate the performance against the plans

• The principle of critical point control, one of the more important control principles, states
that effective control requires attention to those factors critical to evaluating performance
against plans

Principles of Management 54
 Types of Critical Point Standards

• Every objective, every goal of the many planning programs, every activity of these programs, every
policy, every procedure, and every budget can become a standard against which actual or expected
performance might be measured.
• Types of Critical point standards,
(1) physical standards
(2) cost standards
(3) capital standards
(4) revenue standards
(5) program standards
(6) intangible standards
(7) goals as standards
(8) strategic plans as control points
Principles of Management 55
 Critical Point Standards (Cont.)
Types of Critical point standards
1. Physical standards:
• labor-hours per unit of output, pounds of fuel per horsepower per hour, ton-miles
2. Cost standards
• direct and indirect costs per unit produced, labor cost per unit or per hour, material cost per unit,
machine-hour costs, selling cost per dollar or unit of sales
3. Capital standards
• return on investment, ratio of current assets to current liabilities, ratio of debt to net worth, etc.
4. Revenue standards
• revenue per bus passenger-mile, average sales per customer, and sales per capita in a given market
area

Principles of Management 56
 Critical Point Standards (Cont.)
5. Program standards
• a variable budget program, a program for formally following the development of new products

6. Intangible standards
• competence of the divisional purchasing agent,

7. Goals as standards
• Qualitative and Quantitative goals

8. Strategic plans as control points for strategic control

• Systematic monitoring at strategic control points and modifying the organization’s strategy based
on this evaluation

Principles of Management 57
3. Compare actual performance with standard
The third step in control process is the comparison of actual performance with the standard.
It reveals the deviations from the standards. If the performance matches the standard, it may
assume that everything is under control.

4. Analyzing Deviations
At this stage the extent of the deviation and the causes are determined. Deviation means gap
between actual performance and standards. Deviation may be positive or negative.
Deviations in key areas of business require urgent attention. Managers can rely on the
following in this regard.

Principles of Management 58
5. Taking Corrective action
The last but most important step in the control process is of taking corrective action.
Corrective action consists of curative as well as preventive control measures.
Eg

Causes of deviation Corrective action to be taken

Defective Material Change the quality specification for material used

Defective Machinery Repair the existing machine/ replace the machine

Defective process Modify the existing process

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 Benchmarking
• It is an approach for setting goals and productivity measures based on best in
industry practices

• Three types-
1. Strategic benchmarking
• Compares various strategies and identifies the key strategic elements of success
2. Operational benchmarking
• compares relative costs or possibilities for product differentiation.
3. Management benchmarking
• focuses on support functions such as market planning and information systems, logistics, human resource
management, and so on.

Principles of Management 60
Benchmarking
• Benchmarking is a concept that is now widely accepted.
• It is an approach for setting goals and productivity measures based on best industry
practices.
• Benchmarking developed out of the need to have data against which performance can be
measured.
• The benchmarking procedure begins with the
1. Identification of what is to be benchmarked
2. Select the superior performers
3. Data gathering and analysis
4. Set basis for performance goals.
• During the implementation of the new approach, performance is periodically measured
and corrective actions are taken at that time.

Principles of Management 61
Three types of control on the basis of time of action
 Real-time Information and Control or
Concurrent control
• Concurrent controls monitor ongoing employee activity to ensure consistency with quality
standards. These controls rely on performance standards, rules and regulations for guiding
employee tasks and behaviors.

• Employees monitor the measurements; if they see that standards are not being met in some
area, they make a correction themselves or let a manager know that a problem is occurring.
 FEEDBACK/POST ACTION CONTROL 
• Feedback control is a process that managers can use to evaluate how effectively their teams meet
the stated goals at the end of a production process.

• Feedback control evaluates team’s progress by comparing the output the team was planning on
producing to what was actually produced.

• Feedback control attempts to measure the result of certain actions. If problem exist, corrective
action is undertaken.
Control as a Feedback System

• Feedback control is a process that managers can use to evaluate how effectively
their teams meet the stated goals at the end of a production process

• Feedback control evaluates team’s progress by comparing the output the team was
planning on producing to what was actually produced

• Feedback control attempts to measure the result of certain actions. If problem

exist, corrective action is undertaken

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Control as a Feedback System

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 PRELIMINARY/ FEED FORWARD CONTROL

• They attempt to identify and prevent deviations in the standards before

they occur.

• Feedforward controls focus on human, material, and financial resources

within the organization.

• These controls are evident in the selection and hiring of new employees.
For example, organizations attempt to improve the likelihood that
employees will perform up to standards by identifying the necessary job
skills and by using tests and other screening devices to hire people with
those skills.
Comparison of Simple Feedback
and Feed forward Systems

Principles of Management 68
Control Techniques 
• Control techniques provide managers with the type and amount of information they need to
measure and monitor performance. The information from various controls must be tailored
to a specific management level, department, unit, or operation.

• Control techniques may be broadly classified into two categories:-

1. Traditional control techniques.

2. Advance / Modern control techniques.

 TRADITIONAL TECHNIQUES
These are techniques used by companies for long time these techniques haven't become
obsolete and still being used.
These include
1. Personal Observation
2. Statistical Reports
3. Break even analyses
4. Budgetary control

Principles of Management 70
 PERSONAL OBSERVATION
This is the most traditional method of control. Personal observation enables the manager to
collect firsthand information about the employees. It creates a psychological pressure on
employees to perform well as they are personally observed. But it is time consuming and
cannot be employed in all situations.
STATISTICAL REPORTS
Statistical analysis in the form of averages , ratios , correlations etc. are used to present
useful information to the mangers regarding the performance at various areas of the
organization. It provides the information for inter firm comparison and future decision
making.

Principles of Management 71
 BREAK EVEN ANALYSIS
• Break even analysis is a technique used by managers to study the relationship between
costs volume and profit (CVP). It determines the probable profits and losses at different
levels of activity.
• The sales volume at which there is no profit or loss is known as break-even point.
i.e.. Total Revenue =Total cost

Break-even point analysis enables the management to have a check on the variable cost and
also determine the levels of activity at which firm can make its targeted profit.

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 Budgetary control
• Budgetary control refers to how well managers utilize budgets to monitor and control costs
and operations in a given accounting period.

• The comparison of budgeted and actual figures will enable the management to find out
discrepancies and take remedial measures at a proper time.

• The budgetary control is a continuous process which helps in planning and co-ordination. A
budget is a means and budgetary control is the end-result.
Following are the important types of budgets:
Sales Budget: a statement of what an organization expects to sell in terms of quantity as well as
value.
Production Budget: a statement of what an organization plans to produce in the budgeted period.
Material budget: A statement of estimated quality and cost of materials required for production.
Cash Budget: Anticipated Cash inflows and outflows for the budgeted period.
Capital Budget: Estimated spending on major long term assets like new factory or major
equipment.
Research and Development Budget: Estimated spending for the development or refinement of
products and processes.

Principles of Management 74
 Advantages of Budgetary Control
1. Budgetary Control guides the management in planning and policy formation
2. It facilitates management by exception' by identifying areas which require special
attention
3. It results the coordinated efforts of all individuals and departments of the organization.
4. It aims maximization of profit through cost control and proper utilization of resources.
5. It is a good guide to the management for making future plan.“
6. It minimizes wastages and losses and hence increases productivity.

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Advance / Modern control techniques

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TIME–EVENT NETWORK ANALYSES
Gantt chart
A bar chart that shows the time relationships between the “events” of
a production program

Principles of Management 77
 TIME–EVENT NETWORK ANALYSES

Milestone Budgeting
• Milepost or milestone budgeting breaks a project down into
controllable pieces and then carefully follow them.
 NETWORK TECHNIQUES (PERT & CPM)
• PERT (Programme Evaluation and Review Technique) and CPM (Critical Path method) are important
network techniques useful in planning and controlling.
• These techniques are especially useful for planning; scheduling and implementing time bound projects
involving performance of a variety of complex, diverse and interrelated activities.
• Both are decision making tools assisting in project completion.
• These techniques concentrate on time scheduling and resource allocation and aim at effective project
execution within the time frame and costs.

Principles of Management 79
Steps involved in using PERT/CPM
1. Arrange all activities in a logical sequence
2. A network diagram is prepared to show the sequences of activities, the starting point and termination point
of the projects.
3. Three time estimates - optimistic, most likely and pessimistic - are made.
4. The Longest path in the network is identified the critical path. All activities lying in the critical path are
called Critical activities.
5. Plan may be modified for prompt execution and timely completion of the project. PERT and CPM are used
extensively in areas like ship building, construction projects, aircraft manufacture. Etc.

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 TIME–EVENT NETWORK ANALYSES
Program Evaluation and Review Technique (PERT)
• PERT: A time– event network analysis system in which the various
events in a program or project are identified, with a planned time
established for each.
• Developed by the Special Projects Office of the U.S. Navy, PERT was first
formally applied to the planning and control of the Polaris Weapon
System in 1958
From Gantt chart to PERT
 TIME–EVENT NETWORK ANALYSES
Program Evaluation and Review Technique
(PERT)

Principles of Management 82
 MANGEMENT INFORMATION SYSTEM (MIS)
• Management Information System is a computer based information system that provides information and support
for effective managerial decision making.
• MIS is an important communication tool for mangers.
• MIS is also serving as an important control technique.
• MIS provides the required information to the mangers at the right time so that appropriate corrective action may
take in case of deviation from standards

Advantages of MIS
1. It helps in planning, decision making and controlling in all levels
2. It improves the quality of information with which a manger works
3. It ensures cost effectiveness in managing information.
4. Mangers are free from information overload.
5. It facilitates collection and distribution of information among different levels of management.

Principles of Management 83