M.

HANZLA RATHORE

UT 4:LEADERSHIP AND MANAGEMENT

SUBMITTED TO AQIB JAVED

THEORIES OF LEADERSHIP IN RELATION TO MANAGEMENT

ACTIVITIES
Introduction

Theories of leadership explain how and why specific individuals become

leaders. They emphasize the character characteristics and actions that
people might adopt to improve their leadership skills. Top qualities cited by
leaders as essential to effective leadership involve:

 Strong moral principles and ethics

 Excellent organizational abilities

 Competent learner

 Encourages employee development

 Encourages affiliation and connection

These qualities are thought to be the most crucial by leaders all across the
world, according to research. And leadership theories aid in illuminating
how leaders use and cultivate these qualities.Leadership theories have
recently been more codified, which makes them simpler to comprehend,
discuss, and evaluate in practice.

Leadership theory
A leadership theory describes how and why certain individuals become
leaders. The focus is on the characteristics and behaviors that people can
adopt to enhance their leadership ability. According to leaders, strong
ethics and high moral standards are essential qualities of a good leader.

Major Leadership Theories

1. The Transactional Theory of Management Theory

During the Industrial Revolution, this transactional theory was developed to

boost company productivity. It is a leadership approach that emphasizes
the value of hierarchy for enhancing organizational effectiveness.

Leaders Who Practice Transactional Leadership:

 Target immediate objectives.

 Favor standardized processes and regulations

 Recent changes

 Discourage original thought

 Emphasis on one's own interests

 Encourage performance

When there are challenges that are clearly stated and the main goal is to
finish a work, transactional leadership works well.

Theory of Transformation

3
The relationship between leaders and staff can help the organization,
according to the transformational theory of management. This leadership
theory contends that effective leaders inspire workers to go above and
beyond what they are capable of. Leaders develop a vision for their team
members and motivate them to realize it.

Leaders Who Practice Transformational Leadership:

 Self-manage

 Set an example

 Give interaction a high priority

 Be proactive in your work

 Promote the development of employees

 Receptive to fresh concepts

 Take chances and make difficult choices

The Theory of Situations

This idea emphasizes the significance of context and holds that a leader
should adjust to the shifting context to achieve objectives and make
judgments. The level of competence and dedication of the team members
can influence how these leaders choose to lead.

Situational leadership, as per situational theory:

 Develop a connection with the workforce

4
  Encourage employees

 Recognize when alternative leadership philosophies are required in a

given situation

 Develop teams and organizational units

The Great Man Theory

One of the first theories on leadership makes the assumption that these
qualities are inherent, which indicates that leaders are born, not created,
and cannot be learned. This hypothesis asserts that a leader has certain
innate human characteristics, such as:

 Glamour

 Decisive

 Wisdom

 Daring

 Assertiveness

 Appeal

Functional Theory

5
The functional theory of leadership emphasizes how employment or
organization is being led rather than who has been formally designated as
the leader. Within the functional leadership approach, the power to get
things done is supported by a collection of people's behaviors rather than
one individual.

Applying Leadershi Theories at Workplace

10 methods to point out leadership at the office

 Become a thought leader

 Join a corporation for professionals

 Consider the large picture

 Think proactively and with positivity

 Listen to others and pick up tips from them

 Connect with a goal in mind

 Look for a mentor

 Accept diversity

Examples of Leadership Activities

Sports. Sports provide the experience of being a team member and

developing leadership skills (Flavin, 2018).

 Cross-cultural experience. ...

6
  Social groups. ...

 Internships. ...

 Volunteering. ...

 Student government and organizations. ...

 'Passion projects' ...

 'Teamwork'

THEORIES OF MANAGEMENT IN RELATION TO LEADERSHIP

ACTIVITIES

Management theories

Management theories are a collection of ideas that recommend general

rules for how to manage an organization or business. They address how
supervisors implement strategies to accomplish organizational goals and
how they motivate employees to perform at their highest ability.

Typically, leaders apply concepts from different management theories that

best suit their employees and company culture. Although many
management theories were created centuries ago, they still provide
beneficial frameworks for leading teams in the workplace and running
businesses today

Benefits of management theories

7
There are several reasons why leaders should study and apply established
management theories in the workplace, including:

 Increased productivity: Using these theories, leaders learn how to

make the most of their team members, improving performances and
increasing productivity.

 Simplified decision making: Management theories give leaders

strategies that speed up the decision-making process, helping those
leaders be more effective in their roles.

 Increased collaboration: Leaders learn how to encourage team

member participation and increase icollaboration among an entire
group.

 Increased objectivity: Management theories encourage leaders to

make scientifically proven changes rather than relying on their
judgment.

Types of management theories

1. Scientific management theory

Frederick Taylor, who was one of the first to study work performance
scientifically, took a scientific approach to management in the last 1800s.
Taylor’s principles recommended that the scientific method should be used
to perform tasks in the workplace, as opposed to the leader relying on their
judgment or the personal discretion of team members.

2. Principles of administrative management theory

8
Fayol believed leaders had five main functions—to forecast, plan,
coordinate, command and control—and he developed principles that
outlined how leaders should organize and interact with their teams. He
suggested that the principles should not be rigid but that it should be left up
to the manager to determine how they use them to manage efficiently and
effectively. The principles he outlined were:

 Initiative

 Equity

 Scalar chain

 Remuneration of personnel

 Unity of direction

 Discipline

 Division of work:

 Authority and responsibility

 Unity of command

 Subordination of individual interest to general interests

 Centralization

3. Bureaucratic management theory

9
Bureaucratic management theory focuses on structuring organizations in a
hierarchy so there are clear rules of governance. Principles for creating
this system include a chain of command, clear division of labor, separation
of personal and organizational assets of the owner, strict and consistent
rules and regulations, meticulous record-keeping and documentation and
the selection and promotion of employees based on their performance and
qualifications.

This theory has played a key role in establishing standards and procedures
that are at the core of most organizations today.

4. Human relations theory

This theory was developed by Elton Mayo, who conducted experiments

designed to improve productivity that laid the foundation for the human
relations movement. His focus was on changing working conditions like
lighting, break times and the length of the workday

Every change he tested was met with an improvement in performance.

Ultimately, he concluded the improvements weren’t due to the changes but
the result of the researchers paying attention to the employees and making
them feel valued. .

5. Systems management theory

10
This theory asserts businesses consist of multiple components that must
work in harmony for the larger system to function optimally. The
organization’s success, therefore, depends on synergy, interdependence
and interrelations between subsystems. According to this theory,
employees are the most important components of a company, and
departments, workgroups and business units are all additional crucial
elements for success.Per the systems management theory, managers
should evaluate patterns and events within the organization to determine
the best management approach. They need to collaborate and work
together on programs to ensure success.

6. Contingency management theory

Developed by Fred Fiedler, this theory’s primary focus is that no one

management approach works for every organization. Fiedler suggested a
leader’s traits were directly related to how effectively they lead their team.
He asserts there are leadership traits that apply to every kind of situation
and that a leader must be flexible to adapt to a changing environment.

7. Theory X and Y

11
American social psychologist Douglas McGregor introduced X and Y
theories in his book, “The Human Side of Enterprise,” where he concluded
two different styles of management are guided by their perceptions of team
member motivations. Managers who assume employees are apathetic or
dislike their work use theory X, which is authoritarian. Theory Y is used by
managers who believe employees are responsible, committed and self-
motivated. This is a participative management style that gives rise to a
more collaborative work environment, whereas theory X leads to
micromanaging.

IMPACT OF MANAGEMENT AND LEADERSHIP

THEORIES ON ORGANIZATION

Here are some guides how leaders and managers impact organizational
performance through effective and efficient performance. The first stage of
performance management consists of helping people set ambitious yet
realist goals and motivating them towards the achievement of those goals:

 Managers administrate, and leaders innovate.

 Managers maintain, leaders develop.

 Managers control, leaders inspire.

 Managers have short-term views, leaders have long-term views.

 Managers ask how and when, leaders ask what and why.

 Managers initiate, leaders originate.

12
  Managers accept the status quo, leaders challenge it.

LAMBORGHINI’S LEADERSHIP AND MANAGEMENT

13
Elements of Lamborghini’s leadership style – openness and creativity – are
congruent with our recent CEO personality research, particularly as it
relates to dynamic, fluid segments of the technology industry (think Artificial
Intelligence and Autonomous Driving) where creative approaches to
problem-solving and adaptability are key success factors.

Lamborghini is aiming for an even more challenging financial goal for the
coming years: to push annual profitability to a level between 22% and 25% in
the mid-term.
Lamborghini’s profitability is now in line with other top players in the luxury
sector.

LAMBORGHINI CULTURE

Lamborghini reaffirms its commitment to diversity, equality and inclusion during

the European diversity month, held every May. The company has implemented
a series of innovative programs with the overarching goal of creating an inclusive
corporate culture, all of which contribute toward ethical and sustainable practices
in the automobile industry

strategy of Lamborghini company

Lamborghini is aiming for an even more challenging financial goal for the coming years: to push annual
profitability to a level between 22% and 25% in the mid-term. Lamborghini's profitability is now in line with
other top players in the luxury sector.

To deliver the most desirable luxury super sports cars we aim to uncompromising Quality up
to the finest detail.

14
AUDI LEADERSHIP AND MANAGEMENT

Organisational Management Structure

Audi AG is a vast organisation with a Management Matrix/Structure that

consists of many layers across various business functions and
geographical prominence. “The corporate management of Audi AG draws
on its expertise and leadership to promote the interests of more than
80,000 employees, the Audi shareholders and the Audi customers around
the globe. The managers of Audi AG form the basis for responsible
corporate management.”

LEADERSHIP STYLE

Asked about his leadership style, he said, "democratic!" "At Audi India, we
encourage everyone to participate and share ideas. Empowering my team
is my way of working."

ORGANIZATIONAL CULTURE

15
Appreciation, openness, responsibility and integrity are the corporate
values of Audi. These values illustrate that the Audi Group relies on
teamwork, embraces new challenges and embodies diversity. In
addition, Audi has set itself the goal of being a company that bears
responsibility – for the environment and society.

AUDI MOTIVATIONALSTRATEGY

Audi brand has presented its latest strategic plan for electrification, in terms of its product plans and
manufacturing infrastructure. From 2026, the brand will only launch all-electric models onto the
global market, gradually phasing out production of its combustion models by 2033.

Audi is perceived as a luxury in its customer's minds. Audi uses premium price policy to cash its
brand image. Since it is a competitive industry, the price strategy in the Audi marketing mix is
primarily based on competition pricing of premium car manufacturers. Brand equity is high for Audi

6 Major Factors Affecting LAMBORGHINI and AUDI

 Leadership. Perhaps the single largest factor affecting organizational culture is leadership. ...

 The People You Hire. ...

 Your Work Environment. ...

 The Work You Do. ...

 Your Clients/Customers. ...

 A Human Approach.

Intrinsic and extrinsic motivation: why it matters

16
Materialism, the relative importance attached to extrinsic versus intrinsic life goals, has been
consistently linked to lower wellbeing in several domains of life. Wenceslao Unanue – Universidad
Adolfo Ibáñez, Chile – says that if the consumption of a status good is due to the search of extrinsic
rewards, which is very likely, the effect on wellbeing will be negative. Bruno Frey – University
of Basel – says that luxury goods are more strongly subject to decreasing marginal happiness than
are more normal goods, like your favourite pasta.

Variables That Impact an Organization's Motivational Strategies

Cost

Motivational strategies -- whether they involve compensation or take the

form of special recognition or fringe benefits -- cost money

Management Style

Leadership style affects the incentive contracts offered to employees,

whether the style is a result of company culture or individual personality.
Managers with more autocratic styles tend to use negative reinforcement
and fear of punishment to compel workers to achieve the organizational
objectives. Rewards and inspiration are more likely to be used by
managers who demonstrate transformational and transactional leadership
styles.

Company Goals

17
Managers must first determine what goals they want to accomplish before
setting motivational strategies. The strategies they choose should
reinforce the employee behaviors that will help in achieving the business's
objectives. For example, if increased innovation is desired, then rewards
that may include recognition and monetary compensation for an innovative
idea that the firm can bring to market may be implemented. Company
objectives and the complementary reward systems should be effectively
communicated to employees so that they may focus their efforts
appropriately.

Employees' Needs

Motivation strategies must be tailored to fit the needs of employees. Many

motivation theories, including Maslow's "Hierarchy of Needs".Workers are
most motivated by a desire to satisfy their own needs. The "Expectancy
Theory of Motivation," holds that an individual's effort and performance will
increase based on the desirability of the outcome or reward he will
receive.

Range of business situations, appropriate leadership, and

management approaches for managing performance and continuous
improvement.

 Managing performance: is an environment implying a strong push to

encourage development where people can perform efficiently,
effectively, adequately the highest level of work and their viability in
contingent largely on their work, ease of implementation and
scalability.

18
  Continuous improvement refers to ongoing capacity or process of
services or product where development, innovation, growth with
careful balance to move along a long term pathway.

 Business situations: In business situations includes managerial

efficiency, risk taking, forecasting and identification of problems are
somehow some attributes of managing performance in business.

 Internalization of market, availability of trained man-power and

wage structure, focus on undistributed profits, depreciation, congenial
industrial relations, Investor friendly environment etc for required for
managing performance of business.

 General law and order, political stability, productive workforce,

availability of social infrastructure, incentives and concession are
required for continuous improvement in business

Leadership Essentials: Managing Performance

Performance management is an ongoing process where you and your team work together to plan,
monitor and review individual work outcomes, future goals, and development needs. Achieving
leaders set clear expectations, monitor performance, and give feedback.

How to improve performance management in 6 steps

 Oust ineffective, traditional performance reviews. ...

 Identify and praise exceptional talent. ...

 Use OKRs to effectively align individual objectives with corporate goals. ...

 Develop a continuous feedback loop. ...

 Turn your managers into coaches

19
20