Avel-COVID19-BFN-ND1-Principle of Management II-Management Organization & Leadership
Principle of Management
- Understand the principles of personnel management
- Know structures of organisation
- Understand the concept of delegation
- Understand the concept of leadership
- Understand the management functions of motivation
- Understand the importance of effective communication in an organisation.
Management – Management Organization
A management environment within an organization is composed of the elements like its
current employees, management, and especially corporate culture, which defines
employee behavior. Although some elements affect the organization as a whole, others
singularly affect the manager.
A manager’s philosophical or leadership style directly impacts the employees. Traditional
managers give explicit instructions to employees, while progressive managers empower
employees to make most of their own decisions. Changes in philosophy and/or leadership
style are under the control of the manager. Let us look at some of the important
components of a management environment.
Mission and Vision
Mission and vision are both foundations of an organization’s purpose. These are the
objectives of the organization that are communicated in written. Mission and vision are
statements from the organization that bring out what an organization is set for, what is
its purpose, its value and its future. A popular study by a consulting firm reports that 90%
of the Fortune 500 firms surveyed issue some form of mission and vision.
A Mission Statement defines the company’s goals, ethics, culture, and norms for decision-
making. They are often longer than vision statements. Sometimes mission statements also
include a summation of the firm’s values. Values are the beliefs of an individual or group,
and in this case the organization, in which they are emotionally invested.
Company policies are formal guidelines and procedures that direct how certain
organizational situations are addressed. Companies establish policies to provide guidance
to employees so that they act in accordance to certain circumstances that occur frequently
within their organization. Company policies are an indication of an organization’s
personality and should coincide with its mission statement.
Organizational culture is an organization’s believes and values that represent its
personality. Just as each person has a distinct personality, so does each organization. The
culture of an organization distinguishes it from others and shapes the actions of its
Values are the basic beliefs that define employees’ successes in an organization. A hero is
an exemplary person who reflects the image, attitudes, or values of the organization and
serves as a role model to other employees. A hero is sometimes the founder of the
organization (think Bill Gates of Microsoft).
Rites and Rituals
Rites and rituals are routines or ceremonies that the company uses to recognize high‐
performing employees. Awards banquets, company gatherings, and quarterly meetings
can acknowledge distinguished employees for outstanding service. The honorees are
meant to exemplify and inspire all employees of the company during the rest of the year.
Resources are the people, information, facilities, infrastructure, machinery, equipment,
supplies, and finances at the organization’s disposal. People are the most important
resource of an organization. Information, facilities, machinery equipment, materials,
supplies, and finances are supporting, nonhuman resources that complement workers in
their quest to accomplish the organization’s mission statement. The availability of
resources and the way that managers value the human and nonhuman resources impact
the organization’s environment.
9.Management – Leadership
Management philosophy is the manager’s set of personal beliefs and values about people
and work. It is something that the manager can control. Eminent social psychologist and
management researcher, Douglas McGregor, emphasized that a manager’s philosophy
creates a self‐fulfilling prophecy. Theory X managers treat employees almost as children
who need constant direction, while Theory Y managers treat employees as competent
adults capable of participating in work‐related decisions.
These managerial philosophies then have a subsequent effect on employee behavior,
leading to the self‐fulfilling prophecy. As a result, organizational and managerial
philosophies need to be in harmony.
The Many Aspects of Leadership
· The character of top executives and their philosophy have an important influence
on the extent to which authority is decentralized.
· Sometimes top managers are dictatorial, tolerating no interference with authority
and information they hoard. Conversely, some managers find decentralization a
means to make large business work successfully.
· The number of coworkers involved within a problem‐solving or decision‐making
process reflects the manager’s leadership style.
· Empowerment means sharing information, rewards and power with employees so
that they are equal contributors to the organizations outcomes.
· An empowered and well-guided workforce may lead to heightened productivity and
quality, reduced costs, more innovation, improved customer service, and greater
commitment from the employees of the organization.
Each business must go through the process of identifying its individual management
philosophy and continuously review and evaluate the same to see if it is aligned with its larger
Leadership can be stated as the ability to influence others. We may also define leadership
as the process of directing and influencing people so that they will strive willingly and
enthusiastically towards the achievement of group objectives.
Ideally, people should be encouraged to develop not only willingness to work but also
willingness to work with confidence and zeal. A leader acts to help a group achieve
objectives through the exploitation of its maximum capabilities.
In the course of his survey of leadership theories and research, Management theorist,
Ralph Stogdill, came across innumerable definitions of leadership.
Qualities/Ingredients of Leadership
Every group of people that perform satisfactorily has somebody among them who is more
skilled than any of them in the art of leadership. Skill is a compound of at least four major
· The ability to use power effectively and in a responsible manner.
· The ability to comprehend that human beings have different motivation forces at
different times and in different situations.
· The ability to inspire.
· The ability to act in a manner that will develop a climate conducive to responding
and arousing motivation.
Leadership styles/types can be classified under the following categories:
Leadership Style Based on the Use of Authority
The traditional way of classifying leadership is based on the use of authority by the
leader. These are classified as:
Use of coercive power to
give order and expect
compliance. Dogmatic and
leads by the ability to
withhold or give
punishment or rewards,
commands and expects
Some autocratic leaders
happen to be “benevolent
autocrats”, willing to hear
and consider subordinates’
ideas and suggestions but
when a decision is to be
made, they turn to be
more autocratic than
Participative leader who
usually consults with
subordinates on proposed
actions and decisions, and
Ranges from the person
who does not take action
concurrence to the one
who makes decisions but
consults with sub-ordinates
before doing so.
As opposed to autocratic
leadership, this leadership
style provides maximum
freedom to subordinates.
Favors autonomy and
exercises minimal control.
Gives workers a high
degree of independence in
Propounded by Robert Tannenbaum and Warren H. Schmidt, according to the Leadership
Continuum, leadership style depends on three forces: the manager, employees and the
Thus, instead of suggesting a choice between the two styles of leadership, democratic or
autocratic, this approach offers
a range of styles depicting the
adaptation of different
leadership styles to different contingencies (situations), ranging from one that is highly
subordinate-centered to one that is highly boss-centered.
Features of Leadership Continuum
· The characteristics of individual subordinates must be considered before managers
adopt a leadership style.
· A manager can be employee-centered and allow greater freedom when employees
identify with the organization’s goals, are knowledgeable and experienced, and
want to have decision making responsibility.
· Where these conditions are absent, managers might need to initially adopt a more
authoritarian style. As employees mature in self-confidence, performance and
commitment, managers can modify their leadership style.
Leadership Styles in Managerial Grid
Developed by Robert Blake and Jane Mouton, this approach as shown in the following grid,
has two dimensions:
· Concern for people which includes such elements as provision of good working
conditions, placement of responsibility on the basis of trust rather than concern for
· Concern for production includes the attitudes of a supervisor toward a wide
variety of things, such as quality of staff services, work efficiency, volume and
quality of output, etc.
The bi-dimensional managerial grid identifies a range of management behavior based on
the various ways that task-oriented and employee-oriented styles (each expressed as a
continuum on a scale of 1 to 9) can interact with each other.
· Management Style 1,1:
o Impoverished management with low concern for both people and
o This is called laissez-faire management because the leader does not take a
o Also known as delegative leadership is a type of leadership style in which
leaders are hands-off and allow group members to make the decisions.
· Management Style 1,9:
o Country club management having high concern for employees but low
concern for production.
o These leaders predominantly use reward power to maintain discipline and
to encourage the team to accomplish its goals.
· Management Style 5,5:
o Middle of the road management with medium concern for production and
o Leaders who use this style settle for average performance and often believe
that this is the most anyone can expect.
· Management Style 9,1:
o Authoritarian management with high concern for production but low concern
for employees exercising disciplinary pressure.
o This approach may result in high production but low people satisfaction
· Management Style 9,9:
o Democratic management with high concern for both production, and
employee morale and satisfaction.
o The leader’s high interest in the needs and feelings of employees affects
This theory concluded that style 9,9 is the most effective management style as this
leadership approach will, in almost all situations, result in improved performance, low
turnover and absenteeism, and high employee satisfaction.
Systems of Management
Professor Rensis Likert of Michigan University studied the patterns and styles of managers
and leaders for three decades. He suggests four styles of management, which are the
· Exploitative-authoritative management:
o Managers are highly autocratic, showing little trust in subordinates.
o The prime drivers are motivating people through fear and punishment.
o Managers engage in downward communication and limit decision making to
· Benevolent-authoritative management:
o The manager has condescending confidence and trust in subordinates
o Management uses rewards and upward communication is censored or
o The subordinates do not feel free to discuss things about the job with their
superior. Teamwork or communication is minimal and motivation is based
on a system of rewards.
· Consultative management:
o Managers have substantial but not complete confidence and trust in
o Use rewards for motivation with occasional punishment and some
participation, usually try to make use of subordinates’ ideas and opinions.
o Communication flow is both up and down.
o Broad policy and general decisions are made at the top while allowing
specific decisions to be made at lower levels and act consultatively in other
· Participative management:
o Managers have trust and confidence in subordinates.
o Responsibility is spread widely through the organizational hierarchy.
o Some amount of discussion about job-related issues take place between the
superior and subordinates.
Likert concluded that managers who applied the participative management approach to
their operations had the greatest success as leaders.