UNIT – I – Principles of Management

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 I. INTRODUCTION
Concept, nature, process and significance of management; Managerial roles and Skills;
Development of management through; Classical and neo - classical systems; Contingency
approaches: - Robert Owen, Taylor Fayol and Elton Mayo

MANAGEMENT
DEFINITIONS OF MANAGEMENT
 Management is an art of getting things done though people – Mary Parker Follet
 To manage is to forecast and plan, to organize, to command, to co-ordinate and to
Control – Henry Fayol
 Management is the art of knowing exactly what you want your men to do and then
seeing that they do it in the best and the cheapest way. – F.W Taylor
 Management is the creation and maintenance of an internal environment in an
enterprise where individuals working in groups can perform efficiently and effectively
towards the attainment of group goals, it is an art of getting the work done through
and with people in formally organized groups – Koontz and O Donnel

NATURE OF MANAGEMENT
1. It is a Universal Activity: Management is relevant in every sphere of activity. It is
relevant in army, government, private household work etc. the work can be done in a
more systematic manner with the application of the techniques of management. The
material and human resources can be effectively handled and the goal can be attained
with maximum efficiently.
2. It is goal oriented: Management focuses attention on the attainment of specific
objectives. For Ex. a business may aim for a particular level of sales. This can be
achieved by proper forecast of sales by planning production by fixing the targets.
3. It is an Intellectual activity: the practice of management requires application of mind
and intelligence. Every work needs to be properly planned and Execute work has to be
assigned to different Individuals and responsible have to be fixed on them. Ex. in a
manufacturing unit production finance and marketing are the important activities

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 performed. It has to work in proper co-ordination with the other departments. Then only
objectives of the firm can be achieved.
4. It is a process: it is process consisting of various stages/ functions. Planning is the
starting point of management and control is its last stage.
5. Management is both art and science: the practice of science needs knowledge of theory
and formulae. But the practice of art requires skill management is social science. It
focuses attention on the behavior of individuals and groups. The theoretical knowledge
may not help always that time they require skill. Ex if the workers in a factory demand
more pay and threaten to go on strike if their demand is not considered. Here the skill of
the manager will help to avert the strike then it’s theoretical.
6. It is a social process: management deals with the behavior of individuals and groups. In
a work place individuals work as a team. The behavior of an individual is bound to be
different while he is part of a group Eg.: an individual worker may be forced to join a
strike program because of the union.
7. It is an on going activity: it is a continuous process planning, organizing etc have
unlimited use. Management will exist as long as there are human activities.
8. It is intangible: it is invisible cannot be seen. But it can be felt.
9. Management is a Profession: like medical, law and engineering, management has also
come to be recognized as a profession.
Importance of Management:
1. Achievement of Group Goals: Management enables an enterprise to achieve its desired
objectives through proper planning and control. It decides what should be done and how.
It lays down the long term and short term goals keeping in mind the resources of the
enterprise.
2. Optimum utilization of resources: Materials, machines and money are the physical
factors of production. The efficient use of these resources depends upon the efficiency
and motivation of workers. Management makes the workers efficient and motivate
through training, supervision and inspiring leadership. Managers guide and motivate
workers towards best performance

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 3. Fulfillment of social obligations: Sound management monitors the environment of
business and makes necessary changes in business policies and practices. So as to keep
the customers and workers satisfied.
4. Stability of Management it ensures the survival of an organization in a fast changing
environment. It coordinates the activities of different departments in an organization and
monitors team spirit amongst the personnel.
5. Human development Management improves the personality and caliber of people to
raise their efficiency and productivity. A good manager serves as a friend and guide to his
subordinates. He provides vision and confidence.
6. Meets the challenge of change Managers maintain a dynamic equilibrium b/w and
enterprise and its development through innovation and creativity.
7. Integrate various interests: Each person has his own interests. These interests are
different in nature. Management takes steps to integrate various interests to achieve the
objectives of an organization
8. Coordination and team spirit: All the activities of business are grouped into department
wise; management coordinates the activities of different departments and establishes
team spirit to achieve the objectives.

FUNCTIONS OF MANAGEMENT / MANAGEMENT PROCESS / POSDCORB

1. Planning: Planning means forecasting or predicting the future activity in a specific
manner or structure. It is the basic function and essential for all the organization.
2. Organizing: It is collection or joining of all the resources available within the
organization and outside, in order to achieve the organizational goal with efficiency.
3. Staffing: It involves appointing the right man for the right job at the right time. The
management is to analyze the human resource, see if he is suitable for the job and
accordingly allocate the work in the organization.
4. Directing: It is showing the correct path or correct way to achieve the organizational goal
within the stipulated time.
5. Controlling: Controlling as a function involves regulating the person or examining the
person whether he is working in the right way or not. In order to achieve the common
goal as efficient as possible.

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 6. Coordinating: It is a type of support function. It involves accumulating the work to
achieve the task.
7. Budgeting: It means allocation of the resources. It involves financial planning for the
future activities.
8. Reporting: It is a statement showing the various activities to the top management. It
shows the status of the work done.

LEVELS OF MANAGEMENT
A) Top Level Management: the top level management derives its powers and authority
directly from the owners of the enterprise. They are Board of Directors, Chairman,
Managing Directors, COO, CEO etc.
Functions
1. They are setting out the fundamental objectives of the enterprises.
2. They frame major policies for the business.
3. They design the strategies for the attainment of organizational objectives.
4. They appoint key managerial personnel for the middle management.
5. Develop master plans in areas of finance, human resource, technology, marketing and
other functions of organization.
6. To represent the business outside, particularly in discussing business problems with the
Government trade association and so on.
B) Middle Level Management: they are departmental managers (Head of Department) like
Production managers, Marketing managers, Personnel managers, Finance manager,
Regional manager and other managers.
Functions:
1. They play the role of a linking pin between top level management and the lower level
management.
2. They explain the objectives, strategies, policies laid down by the top level management to
the low level management.
3. Communicates the problems, suggestions and view points of the lower management to
the top management.
4. They prepare the departmental plans.

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 5. They submit reports on the performance at various departments to the top management.
6. They offer suggestions and recommendations to the top management for the betterment
of overall management of the enterprise.
C) Lower Level of Management: It is called as operating level management or supervisory
level. This is the level where actual operational work for the enterprise in the areas of
production, finance, marketing, personnel, etc is performed by workers. This level of
management consists of manger like supervisors, the foreman, the sales officers the
accountants the sectional officers.
Functions:
1. They do day to day operational planning in view of the instructions given by the middle
level management.
2. They provide necessary instructions to operators for the best performance of their
assigned jobs.
3. They supervise the work of operators to ensure that their performance is in accordance
with the standards laid down in plans.
4. They submit reports on the performance of operating staffs to the middle management.
5. They operate as a channel of communication between the middle management and the
operators.
6. The problems, suggestions and recommendations of operators are informed by them to
the middle management.
SKILLS OF MANAGEMENT
1. Technical Skills
2. Human Skills
3. Conceptual Skills
 Technical Skills: Technical skill is an imperative skill for managers at the lower level of
management. These people who guide and supervise work of operators under their
subordination. E.g. Production manager must know the type of raw materials to be used, the
proportion the production process and the knowledge of handling the various m/c.
 Human skills: The ability to tactfully deal with human beings and mould their behavior at
work in the desired manner to help attain the common objectives of the enterprises most

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 effectively and efficiently. It requires an understanding of human behavior and it is necessary
for motivating people.
 Conceptual Skills: It is concerned with concepts or ideas. Conceptual means ability to view
the enterprise as whole in totality. To analyze the implications of relevant external
environmental factors economic, social, political, technological etc. for the successful
functioning of the enterprise.
CHARACTERISTICS OF QUALITY MANAGERS
Manager is a person who has the ability or strength to coordinate, motivate and guide all
the personnel working under him so as to make sure they attain the organizational goal in the
most efficient manner possible.
Qualities of a Good manager
1. Good Education
2. Technical Knowledge
3. Personality
4. Communication skills
5. Honesty
6. Positive thinking
7. Control Management
8. Motivation
9. Guide
10. Leadership qualities
11. Coordinate
12. Decision making (planning, forecasting)
13. Innovative
14. Good analysis
15. Risk taking
MANAGEMENT VS ADMININSTRATION
Administration Management
1) All the policies are made by the 1) Management has a main function of
Administration. implementing the decisions made by the
Administration.

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2) They are the owners / proprietors of the 2) They are the managers of the company.
company.
3) Conceptual, human skills are necessary. 3) Technical and human skills are more
important here.
4) The main functions are planning and 4) The main functions are directing and
controlling. organizing.
5) Level of authority:
Administration mainly comprise of Top Management mainly carried on by Middle
level management. and lower level management.
6) Administration is thus more permanent 6) While management may change during
in nature. the course of running the organization.
7) Objective:
They are mainly interested in They actually work for remuneration, thus
 Profitability they direct their efforts towards the
 Sales volume attainment of goal.
8) They don’t take part in the day to day 8) Managers take part in the day to day
activity of the organization. activity.
9) Administration is the thinking process. 9) While the management are the doing
process.

ROLES OF A MANAGER
Mintzberg has identified ten roles of a manager which are grouped into three categories.
1. Interpersonal Roles
a) Figure head : Manager performs symbolic duties required by the status of his office,
making speeches, bestowing honors, welcoming official visitors; distributing gifts to retiring
employees are Examples of such ceremonial and social duties
b) Leader : The manager relationship with his own subordinates. The manager sets an
Example legitimizes the power of subordinates and brings their needs in accord with
those of his organization.
c) Liaison: It describes a manager’s relationship with the outsiders Eg. Government,
industry groups.

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2. Information Roles
a) Monitor: Seeks and collects information to obtain thorough understanding
of organization and environment Eg. Reading periodicals
b) Disseminator: Transmits information received from outsiders or insiders to
other organization members Eg. forwarding mail.
c) Spokes man: Transmits information to outsiders on organization plans,
Policies, actions Eg. board meetings , handling mail.
3. Decisional roles
a) Entrepreneur: an initiate change adapting to the environment and supervises
Design of organization. Improvement projects as opportunities arise.
Prepare strategies
B) Disturbance handler: Responsible for corrective action when organization
faces unexpected crisis.
c) Resources allocator: responsible for allocation of human monetary and materials
resources Eg. scheduling , requests.
D) Negotiator: Responsible for representing the organization in bargaining
and negotiations with others.
EVOLUTION OF MANAGEMENT
PRE SCIENTIFIC MANAGEMENT ERA:
1. Robert Owen (1771- 1858) he advocated that workers should be treated as human beings, he
has taken efforts to improve working conditions in the factory reduce working hours, increase
minimum wages, provide meals to employees, allocate education provision , housing and other
labor welfare facilities. His main contribution is that the effective and good personnel
management was essential part of manager’s job since it pays dividends to the employer.
2. Charles Babbage (1792-1872): he was a professor of math’s of Cambridge university from
1828to 1839. He has suggested aspects like division of labor, work measurement, profit sharing
and engineering to improve the efficiency of management.
He has invented mechanical calculators which were called as “differential machine”.
He has emphasized in improving efficiency through the application of math’s and science in the
operation of factories.
3. Charles Dupin (1784-1873) he has emphasized systematic education in management.

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He was French engineer and formally tried to structure the subject matter of management. These
early contributors focused attention on managerial problems.
They have not presented any unified theory of management.
Systematic and scientific study of management started after 1880. Due to the creation of joint
stock corporate organizational set up.

MANAGEMENT THEORIES
 Classical Theories
 Taylor’s Scientific Management theory
 Fayol’s Administrative theory
 Weber’s bureaucracy theory
 Behavioural theories
 Human Relations theory
 Behavioural Science theory
 Modern Management theories
 Quantitative theory
 Systems theory
 Contingency theory

Types of Managerial Skills

1. Technical Skills
Technical skills refer to the ability of a person to carry out a specific activity. In order to do so,
you need to have knowledge of methods, processes and procedures. Engineers, computer
specialists, accountants and employees in manufacturing departments all have the necessary
technical skills for their specialized fields. Technical skills are essential for first-level managers.
For example, employees at the operational level work with tools, and their supervisors must be
able to teach them how to perform the tasks assigned to them using these tools. First-level
managers spend much of their time in training subordinates and clarifying doubts in work-related
problems.

2. Human Skills
Human skills or interpersonal skills refer to the ability of a person to work well with other people
in a group. It is the ability to lead, motivate, and communicate with people to accomplish certain
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 objectives; Human skills are of paramount importance in the creation of an environment, in which
people feel comfortable and are free to voice their opinions. These skills aid employees during
interaction with their supervisors, peers and people outside the work unit such as suppliers,
customers and the general public. These skills are important for all levels in the organization.

3. Conceptual Skills
Conceptual skills refer to the ability of a person to think and conceptualize abstract situations. It is
the ability where you understand and coordinate the full range of corporate objectives and
activities. These skills are most important at the top management level, as top-level managers
have the greatest need to see the “big picture,” to understand how the various parts of the
organization relate to one another and associate the organization with the external environment.

4. Design Skills
Design skills refer to the ability of a person to find solutions to problems in ways that would
benefit the organization. As a top manager, you should not only recognize a problem but also
suggest ways to overcome them. If you only see the problem, you would become mere “problem
watcher,” and would prove ineffective. Managers at upper organizational levels should be able to
design a rational and feasible solution to the problem by considering the various internal and
external factors.

The relative significance of these skills varies at different levels in the organizational hierarchy as
shown in the below figure. We can briefly summarize them as follows:
 As a first-level manager, you require more technical skills in order to supervise operational
employees. You need to have good human skills as you need to interact with your subordinates on
a regular basis. However, conceptual skills are usually not very essential for the managers at the
supervisory level.
 The need for technical skills is lesser at the middle-management level. Here, human skills and
conceptual skills are more significant.
 At the top-management level, conceptual, design and interpersonal skills are of greatest
importance; there is little need for technical skills.

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Summary:
1. Technical Skills: refers to the ability of a person to carry out a specific activity.
2. Human Skills: refers to the ability of a person to work well with other people in a group.
3. Conceptual Skills: refer to the ability of a person to think and conceptualize abstract
situations.
4. Design Skills: refers to the ability of a person to find solutions to the problems in ways
beneficial to the organization.

Organizational hierarchy
Organizational hierarchy is the order of members in an organization based on their
authority. It's a way to structure an organization using different levels of authority and a chain
of command.

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What is organization hierarchy?
Organization hierarchy is the order of members based on authority. It refers to the ranks from
entry-level employees to senior managers or executives. Organization hierarchies typically
consist of multiple levels, and members with more authority occupy higher positions.
Organizational hierarchy is the order of members in a company based on authority. It typically
has multiple levels, with members with more authority occupying higher positions.
A hierarchical structure is the chain of command within a company that starts with senior
management and executives and extends to general employees. It ensures management levels
understand their relationships with each other and helps companies make efficient decisions.
Here are some other types of organizational structures:
 Divisional structure

Organizations are broken down into divisions that each have their own leadership, departments,
and resources. Each division essentially operates like its own company within the larger
organization.
 Functional structure
The organization is divided into groups by roles, responsibilities, or specialties. For example, an
organization may have marketing, finance, and sales departments that are each overseen by a
manager.
 Functional/Role-Based Structure
This structure has centralized leadership and the vertical, hierarchical structure has clearly defined
roles, job functions, chains of command, and decision-making authority.
Examples of organizational hierarchies members
Aside from employees, here are other important members of organizational hierarchies:
 Chief executive officer (CEO): is the top executive in an organization who guides and directs

the organization to ensure growth, profitability, and development

 Chief operating officer (COO): is typically the second-highest executive who coordinates

activities to ensure the organization operates effectively and stays productive

 Chief financial officer (CFO): coordinates all financial activities within an organization and

may recommend financial opportunities, such as investments

 Directors: oversee departments and ensure department managers, such as finance, sales, and

marketing managers, implement the best policies to ensure productivity

 Department managers: oversee the daily activities of an organization and train employees who
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work in the department
 Department supervisors: assist department managers in coordinating daily activities by

overseeing a group of employees within the department

Here are the benefits of organization hierarchies to organization leaders and

members:
1. Establishes leadership structure for growth and project success
A hierarchy provides leadership at each employment level. For organization leaders, it helps to
focus on the organization's goals and mission. Similarly, it ensures project accountability among
organization members.
2. Provides career path for organization members
A hierarchy can also outline career paths to follow within an organization. Having a structure that
shows executive, managerial, and supervisory positions can help you evaluate your career goals
and what steps to take to reach your desired hierarchy level. For example, a nonprofit's hierarchy
can inform entry-level employees they need to gain supervisory or managerial experience before
becoming executives. Executives and managers also use it to motivate employees who show
managerial or supervisory potential to perform at higher productivity levels.
3. Helps communications
A hierarchy helps to establish efficient communication within a company, especially as an
organization's size increases. For example, having a hierarchy can help in disseminating
information from executives to entry-level employees

TYPES OF HIERARCHY IN AN ORGANIZATION:

Review the common types of organization hierarchies to determine the best option for an
organization:
1. Traditional hierarchy
A traditional organization hierarchy has an individual at the top of the corporate structure. In
companies, this hierarchy starts with the CEO, followed by all company executives, directors,
managers, supervisors, and employees. With this hierarchy, communication is typically between
the employment level above and below your position. For example, suppose you're a maintenance
supervisor in a company that operates on a traditional hierarchy. You can expect to communicate

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with the maintenance manager, who is one step above your hierarchy level, and maintenance
technicians, who are a step below.
This hierarchy can help you understand your purpose within an organization and contribute to its
success. It also makes visualizing potential career paths easier.
2. Functional hierarchy
A functional hierarchy focuses on work roles within an organization grouped by employee
functions. For example, a business may have employees working in the sales department as
others handle the organization's human resources needs. Each department has its directors and
managers who report to the same executives. For example, a company's sales manager and human
resources manager may report to the vice president.
3. Divisional hierarchy
A divisional hierarchy is a structure that involves grouping an organization based on geographic
location, products, or target markets. For example, a company may have a division for products
tailored to children and one for teenagers. With this hierarchy, each division has a reporting
structure and unique departments and resources. For example, the division for children's
products may have its IT, marketing, and sales departments separate from the same departments
of the division for teenage products.
Large companies typically adopt division hierarchies to ensure the development of promising
divisions.
4. Horizontal hierarchy
A horizontal hierarchy, or a flat hierarchy, has few middle management levels between
employees and executives. It is the system executives typically use to start an organization. With
this hierarchy, managers and supervisors have more responsibilities as more employees report
to them. For example, suppose a startup has a CEO, commercial manager, director of research,
and two associates in the commercial and research departments. Because of its size, the CEO may
hold regular meetings with the associates and monitor their progress.
5. Team-based hierarchy
A team-based hierarchy is common in organizations that group employees with varying
specialties and backgrounds. Instead of having sections, such as marketing, sales, or human
resources departments, the organization operates in teams. For example, a team may consist of
two sales representatives, a marketer, and two human resources representatives. The
organization's leaders also determine the authority of team members.
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A team-based hierarchy can improve communication between employees, which would otherwise
occur across departments. It can also be useful for thinking creatively about new ideas or handling
specialized projects. For example, a company can use a team-based hierarchy when merging with
another company or working on an urgent company project.
6. Matrix hierarchy
A matrix hierarchy is common in organizations where employees from departments work on a
project. With matrix hierarchies, you may report to more than one supervisor or leader. For
example, a company's maintenance manager may report to the directors of operations and
engineering. Matrix hierarchies enable departments to communicate easily on projects. As
employees answer to multiple managers, issues also tend to be resolved more quickly. Leaders
typically need to define authority levels clearly to ensure matrix hierarchies of work roles lead to
improved productivity.
7. Network hierarchy
A network hierarchy is a structure where an organization has internal and external employees.
An external employee works for an organization but isn't formally on its payroll, unlike an
internal employee. Company employees may work in different locations, and leaders may
outsource roles to external employees, such as freelancers and consultants. For example, a
company may outsource its IT roles while handling marketing, finance, and sales activities
internally. Organization leaders typically develop reporting systems for network hierarchies.
For example, suppose an organization outsources some marketing roles to a freelancer. The
freelancers may report to internal employees who make up the remaining part of the marketing
department. Network hierarchies also encourage employees to express their ideas to leaders and
increase productivity, as more employees are available to complete projects.

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 What Is a Stakeholder?
A stakeholder is a party that has an interest in a company and can either affect or be
affected by the business. The primary stakeholders in a typical corporation are its investors,
employees, customers, and suppliers.
However, with the increasing attention on corporate social responsibility, the concept has been
extended to include communities, governments, and trade associations.

KEY TAKEAWAYS:
 A stakeholder has a vested interest in a company and can either affect or be affected by a business'
operations and performance.
 Typical stakeholders are investors, employees, customers, suppliers, communities, governments,
or trade associations.
 An entity's stakeholders can be both internal or external to the organization.
 Shareholders are only one type of stakeholder that firms need to be cognizant of.
 The public may also be construed as a stakeholder in some cases.

Stakeholders vs. Shareholders

Shareholders are only one type of stakeholder. All stakeholders are bound to a company by
some type of vested interest, usually for the long term and for reasons of need.
A shareholder has a financial interest, but a shareholder can also sell their stock in the company;
they do not necessarily have a long-term need for the company and can usually get out at any
time.
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 For example, if a company is performing poorly financially, the vendors in that
company's supply chain might suffer if the company limits production and no longer uses its
services. Similarly, employees of the company might lose their jobs. However, shareholders of
the company can sell their stock and limit their losses.

SOCIAL STAKEHOLDERS:

Social stakeholders are external groups and organizations that can affect or be affected by a
company's strategy and performance. They can be primary or secondary stakeholders:

 Primary stakeholders
These stakeholders are the backbone of an organization and include employees, managers,
investors, customers, suppliers, business partners, and local communities.
Primary stakeholders are those individuals, groups or entities that are involved with the
monetary transactions of an organization. This means that they have a financial investment
in an organization's operations. Primary stakeholders may include any of the following:
 Employees
 Customers
 Suppliers
 Investors
 Beneficiaries
 Lenders
 Partners
 Banks
Whether they're an individual who earns a paycheck through working for your organization or
they're a high-level investment entity, primary stakeholders depend on an organization for
income and future security. Therefore, primary stakeholders' investments are financially urgent,
and their actions can tangibly impact how efficiently an organization operates on a daily basis.

 Secondary stakeholders:

These stakeholders are invested in the social transactions of an organization, but are not
directly involved with its financial actions. Secondary stakeholders include the government
and civil society, social and third-world pressure groups and unions, media and
commentators, trade bodies, and competitors.
Stakeholders can be internal or external to an organization. For example, shareholders are
stakeholders who are financially invested in an organization.
Secondary stakeholders may include any of the following:

 Local communities
 Activist groups
 Competitors
 Trade unions
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 Media groups
 State or local government organizations
 Workforce commissions
 General public

There are a broad number of secondary stakeholders within any given organization, and they can
be challenging to identify unless they actively vocalize concerns. While secondary stakeholders
don't have immediate interests in an organization's continued operations, they can still
possess a fair amount of influence over an organization's actions. Secondary stakeholders'
level of power relates to their social investment in an organization. They can directly
influence an organization's reputation and may even become primary stakeholders.

Social responsibility is an organization's legal and voluntary duty to consider the social and
environmental impact of its decisions and activities.

*Here are some ways to measure social responsiveness in

organizations:
 ESG
Environmental, Social, and Governance are three tangible objective metrics that corporations
use in self evaluation. Investors and consumers can also use these figures to measure a
company's impact.
 CSR Reporting
Also referred to as Environmental Social Governance (ESG), this is about measuring
organizational performance using non-financial data and metrics to convey ethical, behavioral,
and motivational drivers.
 CSR Impact Assessment
This evaluates the social, economic, and environmental impacts of a company's activities and
initiatives. It helps organizations measure their social responsibility performance, identify areas
for improvement, and ensure transparency and accountability.
1. Benchmark Against Top Performers
Benchmarks are one of the most common indicators for measuring business social performance.
They may not be the clear guides of success, but if you can look to who is doing well with
their CSR initiatives(opens in new tab) you may have a better roadmap
2. Use KPIs to Measure CSR Performance As You Go
Organizations should make short-term and long-term goals to generate benchmarks for success

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and key performance indicators (KPIs). The KPIs an organization sets should be considered
CSR metrics and stepping stones that will eventually lead to achieving the overall desired
goal. Each organization is different and each desired outcome will be different, so
measurement will be unique to each situation. However, keep in mind that understanding the
indicators or variables for measuring corporate social responsibility is vital no matter the
organization or goal, as measuring progress towards desired outcomes will sustain the
company’s entire CSR campaign.
There are a few performance variables and indicators that could be included in your CSR
performance reporting:
 Employee Perspectives
 Health and Security
 Diversity Supportive Ratio
 Respect Ratio
 Satisfaction Ratio
 GreenHouse Gas Emissions
 Quantity of Waste
 Efficiency in Energy Use
 Social Policies Followed
 Social Contribution
 Strategic Partners
 Responsibility Percentage
 Time Spent in Volunteering
 Management Perspective
 Management Initiatives
 Recognition Initiatives
 Recognition Achieved
 Effectiveness in Communication
 Number of Social Activities
 Number of Community Members Reached
 Total Impact
3. Employ Recognized Industry-Standard Measurements
There’s no unified standard on how to measure CSR performance, but there are industry-
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 standard tools that can be used as a guide to help organizations with developing and
measuring CSR strategy (opens in new tab) and initiatives.
A few of those tools include:
 Community Mark(opens in new tab): The UK’s only national standard that publicly
recognizes excellence in community investment
 GRI (opens in new tab): The first global standards for sustainability reporting
 SASB(opens in new tab): Measures the financial impact of sustainability
 B Corp Certification(opens in new tab): The only certification that measures a company’s
entire social and environmental performance
 International Labor Organization Supplier Frameworks(opens in new tab): A global tool
for supporting rights at work

*Here are some ways to measure managerial ethics:

 Observe employee actions

A company's ethical standards can be measured by observing the results of employee

actions. A loyal and satisfied customer base is a good indicator that employees are treating
customers ethically.
 Assess moral sensitivity

Individuals are expected to be sensitive to moral issues and account for business-related
issues.
 Consider ethical corporate culture

Research shows that an ethical corporate culture can reduce business misconduct and risk
profiles.
 Consider social responsibility

A responsible organization considers the impact of its decisions and activities on society
and the environment.
Ethical standards can establish trust between business partners and
customers. Organizations can earn this trust by demonstrating a pattern of ethical
behavior over time.

Other parameters to measure effectiveness of Business Ethics: (What to Measure)

1) Perceived features of the work environment (The Place)
 Perceived ethical culture at workplace
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 Workplace ethical judgment and decision-making
 Perceived unethical behaviors at workplace
 Organizational justice
 Workplace conflict
 Emotional support
 Psychological Safety
 Perceived politics
2) Traits and values of the employees (The People)
 Moral identity
 Trust
3) Reputation of the firm (in the eyes of outsiders)

How to Measure [below are some of the available methods for assessing the
constructs listed above]
1) Direct measurement techniques (assume honesty of respondents)
 Survey questionnaires (with rating scales)

 Free-response questions

 Structured Interviews

 Formal exit interviews

2) Indirect measurement techniques (may be less vulnerable to “gaming” and self-

presentational biases)
 Implicit measures, such as the Implicit Association Test

 Simulations (Decision making scenarios)

 Behavioral games

3) Objective data (does not require participation by employees)

 Text analysis (e.g., of big data sets such as all internal emails)

 Earnings restatements (compared to peers in same industry)

 Ratings on GlassDoor.com and other ratings sites

************************

22
 SYMBOLIC & OMNIPOTENT VIEW OF MANAGEMENT:
The omnipotent and symbolic views of managerial ethics are contrasting perspectives that
explain the extent of control and influence that managers have over the ethical climate within
an organization. While these views represent two ends of a spectrum, the reality often lies
somewhere in between. Managers do have significant influence over organizational ethics,
but they are also constrained by various internal and external factors beyond their control.
Understanding these perspectives can help managers navigate ethical dilemmas effectively
and cultivate a positive ethical climate within their organizations.

1. Omnipotent View:
 The omnipotent view suggests that managers are all-powerful and have significant

control over the organization, including its ethical standards and practices.
 According to this view, managers have the authority to shape the organizational culture,

set ethical guidelines, and enforce them effectively.

 In this perspective, the actions and decisions of top executives directly influence the

ethical behavior of employees throughout the organization.

 The success or failure of an organization's ethical standards is seen as a direct

reflection of managerial leadership.

 In the omnipotent view, managers are perceived as having substantial control and authority

within their organizations. They are seen as the primary architects of organizational
culture, including its ethical standards.

2. Symbolic View:
 In contrast, the symbolic view proposes that managers have limited influence over the
organization's ethical climate and that external factors play a more significant role.
 This perspective suggests that managers are figureheads who symbolize the organization's
values and ethics but do not have absolute control over them.
 External factors such as societal norms, industry standards, legal regulations, and
organizational culture can shape ethical behavior more than managerial actions.
 Managers' actions may be more symbolic gestures rather than determinants of actual
ethical conduct within the organization.
 The symbolic view posits that while managers may hold formal authority, their influence over

organizational ethics is limited

23
 Nature & Importance of Organization Culture:
Meaning: ORGANISATIONAL CULTURE
“Atkinson defines organisational culture as the collection of traditions, values,
policies and attitudes that constitutes a pervasive context for everything we do and
think in an organisation”. Organisational culture is the way work is been performed
whether it is acceptable or not acceptable and the behaviour or actions are
encouraged or discouraged. The culture of organisation is linked to the personality of
an individual.

MODELS OF ORGANISATIONAL CULTURE

There are four models of organisational culture. They are:

1. Power culture: Power culture is mostly found in small entrepreneurial organisations

and it relies on trust, and personal communication for effectiveness. Control is exercised
by selection of key individuals. It is a political organisation which decisions taking largely
on balance of influence. They are few rules and procedures and little bureaucracy.

2. Role culture: Role culture rest on the strength of strong organisation pillar. These are
the specialist of the company. Such as Finance, Production, Administration, Marketing,

24
Purchasing etc. Their roles or job description are more important than any individual in the
organisation and their position is the main source of power.

3. Task culture: Task culture bring right resources and people into the organisation.

4. Person culture: Person culture exists when the employee think they are more
superior or important than the organisation.

CORPORATE CULTURE

Organisations have set of values and goals that help them to achieve their aims and
objectives. Corporate culture is described as collection of values, systems, beliefs, and
processes that give the company its own special attitude. Every organisation has a
corporate culture and standard that oversees the operation of the company. These standards
can be in form of rules, procedures and policies that will determine the standard the
organisation will operate.

Eg: Organisation Profile of Avon UK

Avon is the company for women, is a leading global beauty company, which generate
more than $10 billion income annually. Avon is the first in the world’s that has largest
direct selling. Avon markets to women in more than 100 countries through approximately
6.5 million active independent Avon Sales Representatives. Avon’s product line includes
beauty products, as well as fashion and home products, and features such well-recognized
brand names as Avon Colour, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals,
and mark. Learn more about Avon and its products.

Presently in the UK, Avon now reaches one in three women, with six million women
seeing an Avon brochure every three weeks through Avon sales representatives.

As the company for women, Avon is committed to supporting the causes that matter most
to women – breast cancer and domestic violence. Globally, Avon has raised over $800
million to date as the world’s largest supporter of women’s causes.

The mission of Avon is to be the company that best understands and satisfies the
product, service and self-fulfilment needs of woman globally. The core five values of
Avon are Trust, Respect, Belief, Humility and Integrity.

25
26
27
 //
The Importance of a Thriving Organisational Culture:

Here are some ways organisational culture can improve business:

1. Identity
An organisation’s identity is underpinned by its culture. The processes and values of an
organisation will contribute to its brand image. Employees, customers and the public will all have
their own perceptions of your organisation. This is largely determined by its culture.
2. Onboarding
A company with a clear organisational culture will easily be able to align new starters with the
company’s goals and values. They will have a clear set of practices and beliefs. This will
28
encourage new starters to adhere to their processes and rules of engagement.
3. Loyalty
If your employees view themselves as part of the culture, they will make decisions for the greater
good of the organisation. It will also ensure your people will remain loyal during periods of
organisational change and won’t consider jumping ship.

4. Direction
When your people are aware of the company goals and vision they will have a clearer sense of
what is expected of them and why. This provides everyone with direction, which will keep your
people on-task.

5. Unity
Strong organisational cultures create a sense of community and cohesion. This will help to unite
all your people. This will promote better communication, thus improving collaborative projects
and reducing conflicts.

Organizational culture is important because it can have a significant impact on organizational

performance. It can shape how people work together to achieve goals and can have a significant
impact on employee satisfaction, productivity, and retention.

Here are some reasons why organizational culture is important:

1. Employee engagement: A positive company culture can encourage employee
engagement, and engaged employees can contribute to building a stronger culture.
2. Decreased turnover: Reducing employee turnover can help foster loyalty and
commitment. High turnover rates can lead to increased expenses, decreased productivity,
and a loss of institutional knowledge.
3. Effective on-boarding: Effective onboarding can help new hires learn and get
accustomed to the organizational culture. Studies show that great onboarding can reduce
turnover by 82% and improve productivity by 70%.
4. Strong brand identity: Brand identity is an integral part of the culture of a company. It
helps to determine how employees feel about the company and how clients view the
business.
5. Elevated productivity: A healthy organizational culture can provide an environment
where employees will be more productive. When people have a sense of belonging, they
will feel empowered and their productivity levels improve.
6. Culture attracts and retains talent: An organization's culture can attract and retain top
talent, rally employees to find innovative solutions to problems, and protect the company
from outside threats
29
Creating a Thriving Company Culture

Few tips that we feel are important for any thriving work culture:

1. Listen

It is vital to listen to your employees and create a dialogue with them. By creating an
environment where your people feel comfortable enough to reach out – you will promote
honesty and transparency. This will help you to learn how everyone is feeling, so you can
remedy concerns and build on successes. Consider an always-on listening tool such as our
Employee Voice for open, honest feedback whenever your people need to communicate.

2. Empathise

Empathy is a vital skill for any leader that wants to understand, motivate and recognise the
achievement and effort of their people. Our global study of workplace happiness placed
‘feeling recognised/valued’ in the top spot, which demonstrates how important it is for the
modern employee to feel valued and understood.

30
3. Communicate

This comes hand-in-hand with listening. Clear communication means sharing your
thoughts, plans and targets whilst accepting open feedback. Talking to your people
regularly will ensure your people feel motivated, valued and engaged. Putting systems in
place where your people know how and where to contact you will help you accurately
gauge how they are feeling, whilst creating two-way conversations. This will highlight
what needs to stop, start, change and continue to improve culture and ultimately profits.
We’ve addressed this important need in our platform via our ‘closing the feedback loop’
tool, which allows completely anonymous conversations and feedback to concerns through
the platform.

4. Empower & Trust

It is impossible to know everything that goes on within your organisation. It is therefore

essential to trust your workers and empower them to make the right call. This may seem
quite daunting to some, but the benefits for your organisation and its culture are huge.
Manish Goel, from computer software company Aerospike Inc, says “It is important for the
entire company to know that they are an integral part of the company’s success.” Before
adding, “Control outcomes, not behaviours."

31
UNIT – II – Planning & Organizing

1
 II. PLANNING
Planning - Nature - Importance - Forms - Types - Steps in Planning - Objectives - Policies -
Procedures and Methods - Nature and Types of Policies - Decision Making - Process of
Decision making - Types of Decisions - Problems involved in Decision - making.

PLANNING
 Planning is deciding in advance what to do, how to do it, when to do and who is to do. it
bridges the gap from where we are to where we want to go – Knootz O Donnel
 Planning is deciding the best alternative among others to perform different managerial
operations in order to achieve the predetermined goal--- Henry Fayol
 Planning is the process of thinking through and making explicit the strategy, actions, and
relationship necessary to accomplish an overall objective or purpose. --- Cleland and King

NATURE OF PLANNING: (CHARACTERISTICS OR FACTORS OF PLANNING)

 Planning is the primary function of management: planning is the starting point of
management, which gives meaning to all other managerial activities. For Eg. : Organization
set 10,000 no to produce products.
 It is goal oriented: planning helps to attain the goal is the most effecting and efficient
manner.
 It is all pervasive: planning is done everywhere in all the levels all the managers and
departments.
 It is an intellectual activity: planning is a mental activity. It involves application of mind
and intelligence to attain.
 It is future oriented: planning is required to attain the future goals of an organization.
 It requires an integrated approach: planning links between the plans of different
departments.
 It is a continuous process : planning is required as long as we live in the world

IMPORTANCE OF PLANNING (MERITS OR ADVANTAGES)

 It focuses on objective: once the objective of the business has been fixed the next step is to
prepare plan for its effective accomplishment. E.g. the annual target of the production

2
 department of a business cannot be achieved in a week. It should be divided into monthly,
quarterly and half weekly targets etc.
 It helps to avoid no work or work pressure situations – planning helps to distribute work
evenly throughout the year.
 It helps to avoid wastage of resources: by planning employees and executives know
beforehand what they have to do.
 It ensures efficiency as well as effectiveness doing right things.
 It reduces risk and uncertainty – planning is for future and future is uncertain . But in
planning the future uncertainties are anticipated and adequate provisions are made to
overcome.
 It provides for co-ordination
 It facilitates control planning without control is useless and control without planning is
meaningless
 Planning provides scope for decentralization

PROCESS OF PLANNING (STEPS INVOLVED IN PLANNING / STAGES INVOLVED

IN PLANNING)
1. Identifying business opportunities: it is necessary to make an analysis of both the
internal and external environment to know the trends in the near future. Business
activities are influenced by internal as well as external factors, regulations, technological
changes, competition etc. the businessmen therefore have to look for opportunities
always by observing the business environment.
2. Establishment of objectives: planning process is to establish the organization objectives
in tune with the opportunities identified, taking into account the resources available. The
overall objective of the organization must be stated along the specific objectives of
departments
3. Determination of Planning Premises: planning premises are the assumptions about the
future happenings. As planning is for future and future is uncertain, certain assumptions
about the future become necessary Eg. Employee attitude technology uses, managerial
decisions making process etc. are some of the factors influencing the internal

3
 environment of business. The external environment is like demand, buyer behavior,
competitors action, government regulations, suppliers actions
4. Identifying the alternative course of action: there are always alternative ways of
carrying out any task just as here are different routes to reach a destination point. To
attain the objective of a business different course of action may be available.
Eg. To maximize profits any of the following method used.
1. large scale production
2. curtailing the cost of production and distribution
3. maximizing sales
4. Increasing the market share and so on.
5. Evaluating alternative courses of action: once the alternative courses of action are
identified, the next step is to evaluate the same. Evaluating means studying the merits and
demerits of each alternative should be examined carefully to decide on its suitability.
6. Selecting the best course of action: once the alternative course of action has been
evaluated the next step is to select the best. The one finally selected should help the
organization in making an optimum use of the available resources and help to attain the
objective.
7. Formulation of derivative plans: after the basic plan of the organization has been
determined the next step is to prepare the subsidiary plans to support the basic plan.
8. Periodic evaluation and review: once the implementation of the plan starts it becomes
necessary to evaluate performance of periodic intervals to ensure that the activities of the
originations precede in the right direction and as laid down in the plan.

TYPES OF PLANS
CLASSIFICATION OF PLANS ACCORDING TO TIME
I) long term planning: this plan is usually 5 to 15 years. It is also called as strategic planning. It
prepares the business to face the effects of long term changes.
a) Introduction of a new product
b) entering a new market
c) changing the technique of production
d) increasing the scale of production

4
II). Medium term planning: it is known as tactical planning, the period covered by the medium
term plan is usually 1 – 5 years.
The plan is needed for
1. Making additions to an Existing plant.
2. Expanding the factory
3. appointment if additional staff to cope with the volume of work
III). Short term planning: it is known as operational planning
the period covered is less than one year.
- purchase of raw materials
- Arranging for employee training etc.
LIMITATIONS OF PLANNING
1. Uncertain Nature: future happenings cannot be accurately foreseen. Eg. natural
calamities, floods earthquake etc.
2. Expensive: preparation and implementation of plan is expensive.
3. Rigidity: strictness and lack of flexibility leads to monotony.
4. loss of initiative :
5. Ignorance of subordinates interests
STEPS TO MAKE PLANNING EFFECTIVE
1. The success of planning depends upon the effectiveness of the forecast. If the forecast is
accurate the plan will be success.
2. Flexibility must be introduced in the plan whenever necessary so that the employees will
work with interest.
3. All the members’ ideas and views taken into consideration for making the plans then the
employees will be interested.
4. The plan should not be prepared to focus on the financial goal alone. There should be for
development of employees.
5. The plan must be realistic. It should take into account the capabilities of employees.
6. The plan must be communicated to subordinates.

5
METHODS OF PLANNING
Repeated use plans Single use plans
a) Objectives a) Programmes
b) Policies b) Budgets
c) Procedures
d) Rules
e) Strategies
1. OBJECTIVES: aims, goals, targets, missions, etc. objective is the destination point. The
important are,
 profit maximization
 a higher market share
 customer satisfaction
 Product diversification
Advantages of Objectives
 Objectives give focus to the activities of the organization.
 Planning depends on the objectives of an organization
 Integration of the activities of an organization is based on objectives
 Objectives provide the necessary yardstick for measurement of performance.
Disadvantages of objectives:
 Certain objectives cannot be measured quantitatively Eg. employee attitude
 In the name of objective there may be a tendering to exploit its workers this results
frustration among the workers.

*MANAGEMENT BY OBJECTIVES (MBO)

It is a technique by which the superior and the subordinate jointly identify the objectives desired
to be achieved by the subordinate in tune with the overall results expected.
Stages involved in the process of MBO
1. Define organization goals
Setting objectives is not only critical to the success of any company, but it also serves a variety
of purposes. It needs to include several different types of managers in setting goals. The

6
objectives set by the supervisors are provisional, based on an interpretation and evaluation of

what the company can and should achieve within a specified time.

2. Define employee objectives

Once the employees are briefed about the general objectives, plan, and the strategies to follow,
the managers can start working with their subordinates on establishing their personal objectives.
This will be a one-on-one discussion where the subordinates will let the managers know about
their targets and which goals they can accomplish within a specific time and with what resources.
They can then share some tentative thoughts about which goals the organization or department
can find feasible.
3. Continuous monitoring performance and progress
Though the management by objectives approach is necessary for increasing the effectiveness of
managers, it is equally essential for monitoring the performance and progress of each employee
in the organization.
4. Performance evaluation
Within the MBO framework, the performance review is achieved by the participation of the
managers concerned.
5. Providing feedback
In the management by objectives approach, the most essential step is the continuous feedback on
the results and objectives, as it enables the employees to track and make corrections to their
actions. The ongoing feedback is complemented by frequent formal evaluation meetings in
7
which superiors and subordinates may discuss progress towards objectives, leading to more
feedback.
6. Performance appraisal
Performance reviews are a routine review of the success of employees within MBO
organizations.
Advantages of MBO
 It promotes better communication relationship between the superior and subordinates.
 It gives the subordinate an opportunity to fix his target, in consultation with his superior.
 Subordinate fix the target based on his own potentials.
 They feel they are motivated and take lot of effort to achieve the target.
 Periodical review helps him to go on his right direction.

Disadvantages of MBO
 The superior and subordinates have to meet several times to set the objectives.
 Periodical review of the performance consumes more time and paper work.
 MBO has not much to do with the lower levels of management.

*POLICIES
A policy serves as a valuable guide to the managers when they take certain important decisions,
policies provide ready answers to question pertaining to certain issues. They prescribe the limits
within which the decisions have to be made.
Eg: employee promotion whether seniority or merit or both.
Essentials if a good policy
 It should be clear and definite; it should not give scope for misinterpretation.
 The policy should be logical.
 The policy based on ethical and moral values.
 Should be fair to all the employees.
 policy should be revised periodically

Factors determining the formulation of policies

 The beliefs and value of the owners of business

8
  Government regulations, Availability of funds
 Technology to adopted, Market trends
 Reactions of trade unions, General business environment
Merits of policies
 Policy guide managers to take bold decisions
 They save time by providing a ready solution to certain problems
 They ensure consistency in decision making
 Policies prevent the managers from misusing their authority
Limitations of policies
 Policies cannot provide solutions to all organizational problems
 Policies provide guidelines not solutions.
 It is necessary to review the policy periodically otherwise it becomes outdated.
 We cannot blindly apply the policies.
 Policies do not allow the managers to think originally

TYPES OF POLICIES
1. Formulated Policy: A formulated policy is one which is specified by the organization for
providing guidelines to its members. Every organization formulates various policies on
different aspects. This policy flows from higher level to lower levels in an origination.
2. Implied Policy: sometimes policies may not be clearly stated and the actions of managers
particularly at the higher levels provide guidelines for actions at lower levels. These actions
might constitute the policy. Sometimes the organization has clearly expressed policies for its
image, but it is not able to enforce these. In such a case the action of a decision maker
depends on his own guidelines and prejudices.
3. Imposed Policy: This arises from the influence of some outsider agencies. Such agencies
may be government which provides policies for all public sector organizations. These
agencies may either provide complete guidelines on a subject matter or provide a broad
framework for devising specific policies. For Eg. in public sector commercial banks
recruitment and selection is done by banking service commission and individual banks do
not have and control.
4. Appealed Policy: An appealed policy arises from the appeal made by a subordinate a
manger to his superior for deciding an important case. The need for such an appeal may arise
9
 because the particular case has not been covered by any policy. The appeal is then taken
upward and the decision is made on the case sets precedent which becomes policy providing
guidelines for deciding similar cased in future.
PROCEDURES
A procedure will lay down the manner in which certain work has to be performed. It prescribes
sequence of operations to be carried out to completer a given task.
Advantages
1. It prescribes the sequence of operations to be performed.
2. They facilitate systematic performance of the work.
3. They ensure that the work proceeds in the right direction.
4. Procedures ensure consistency and uniformity of action
5. It secures proper coordination.
Disadvantages
1. The procedural formalities make delay in the performance of the work.
2. A few procedures result in confusion.
RULES
Rules are the do`s and don’ts. They are always rigidly enforced. There is always a fine or penalty
for the violation of rules. Eg. no smoking in the workplace, Wear uniform while in the factory.

* PLANNING PREMISES?
A planning premise is a set of assumptions that are derived from forecasting the future. It is
a logical and systematic estimate of the future factors that can affect planning. Planning
premises provide a background against which the estimated events take place. These are the
events that affect planning. Establishing planning premises is a critical element in the planning
phase, which ensures that all managers in the organisation are in sync with each other. To
explain planning premises, let us consider a few examples from business and government
planning:
In the budget, there is an announcement of even changes in the tax laws. These are known
conditions on which planning is based.
A competitor might enter the same market as yours with the same kind of product. This is an
anticipated event; the possibility of that happening is not particular.

Importance of Planning Premises

The premise of planning is the framework on which planning is based. Amid uncertainty
surrounding business and management, it is these planning premises that imply not just
10
 assumptions about the future but also predictions. They are the bedrock on which managers
plan the future course of action. Without proper planning premises, the planning does not have
a solid foundation. If panning premises change, the plans need to change as well. Here are the
primary reasons for establishing planning premises:
 They help in well-organised planning.

 The risk of uncertainty is reduced considerably.

 There is a reduction in the risk of flexibility.
 Managers can do effective coordination.
 It also increases profitability.

Types of Planning Premises

Planning premises in management are vital in making important decisions that are based on
certain predictions about the future. Managers build the superstructure of planning based on
their ability to identify the crucial, strategic, or limiting factors that allow them to select the
proper planning premises. Planning premises in business management can be classified based
on many factors, as described below:

1. Internal and External Premises

 The premises which exist within the boundaries of the business are internal premises.
Some of the internal premises are men, money, material, and methods. Your planning
would be based on how competent is your workforce and how much money you have at
your disposal.

 External premises are derived from the environment that surrounds the business. They
are centred around the market like money market, product market, government policies,
growth in population, etc.

2. Tangible and Intangible Premises

 Any premise which can be quantitatively measured is a tangible premise. These
premises can be quantified in terms of time, money, and units of production.

 On the other hand, intangible premises cannot be quantified. Some of the intangible
premises are public relations, business reputation, the morale of employees, etc.

3. Controllable, Semi-Controllable, and Uncontrollable Premises

 Those premises which can be controlled by the management to a large extent come
under controllable premises. Management has a lot of control over their future
commitments when it comes to material, machines, and money.

11
  The business can partially control some premises or assumptions about the future.
These fall under semi-controllable premises. Few examples of such planning premises
are trade union relations, product demand, etc.

 Those premises which can not be controlled by the management of an organisation

come under uncontrollable planning premises. Some examples are weather conditions,
natural disasters, etc.

4. Constant and Variable Premises

 These premises which do not change irrespective of actions taken are constant
premises like men, money, etc. These premises behave similarly under all circumstances.

 Based on the course of action taken, some premises change which is termed as
Variable premises. These premises cannot be controlled or predicted, for example, the
sales volume of a firm, union and management relations, etc.

A TYPICAL PROCESS OF DEVELOPING PREMISES IN PLANNING IS:

 Selecting the Premise - Not all the factors in the environment affect the operations of the
business. The management must list down those premises which directly influence the
development of organisational plans.

 Reviewing Limitations - Several practical factors limit the abilities of an organisation to

achieve its goals. Such limitations should be anticipated and provided for. A few examples of
such limitations are power, labour, money, and material.

 Developing Alternative Premises - Since it is not possible to predict all the factors that can
affect organisational planning, managers must develop a set of alternative premises. These
premises are established based on separate assumptions of future events. The alternative plans
are developed since premises keep changing, some change slowly and some fast.

 Verifying Premises - In an organisation, there are different departments and planning

happens at different levels as per the judgement of people in that department. All these
premises are sent to the top management for their approval. The premises developed by line
managers and staff are more consistent with each other than those of the top executives.

 Communicating Premises - The premises developed through this process are then supported
by budget and various programs. Then the premises are communicated to all those who are part
of the planning process at different levels of business. Documents like ETOP (environmental
threat and opportunity profile) contain planning premises.

*STRATEGIES
Strategies means plan of action to counter the opponents attack. It is a tactics adopted to
12
 countercompetitor’s actions. Organization adopts strategy when they are in crisis.
1. Fall in sales.
2. Competitive pressures
3. Trade union demands etc.
A strategy is a plan or set of plans intended to achieve something, especially over a long period. It can be a
blueprint of decisions in an organization that shows its objectives and goals.
Strategists often refer to three levels of strategy:
 Corporate level strategy

The overall strategy of an organization that is made up of multiple business units,

operating in multiple markets
 Business level strategy

Guides the decision-making processes to improve the company's financial stability in a

competing market.
 Functional strategy

A business strategy that focuses on the action plans by a particular functional area in
order to achieve the set business objectives
Other types of strategies include:
 Operational level strategy: A fundamental level that is key for successful strategy
execution
 Management strategies: Techniques used in business control and direction to
achieve the set goals
 Leadership strategies: Examples include strategies for leadership, goal-setting,
operational activities and business administration

What are management strategies?

Management strategies are techniques used in business control and direction to achieve the
set goals. Examples include strategies for leadership, goal-setting, operational activities and
business administration. These strategies make it possible for organisations to achieve top
performance. An excellent management strategy paves the way for success by:

 Determining an organisation's objectives and goals

 Putting in place the timeline for achieving both the long- and short-term goals

 Establishing the resources for achieving the set goals

 Providing the company and those in its employment with a clear sense of direction

HERE ARE SOME STRATEGIES IN MANAGEMENT:

13
1. Business strategy: A plan that defines how a company intends to compete in the
market. It's a long-term plan that aligns a company's vision and goals with its practical
execution in the market.

2.Operational strategy: Focuses on a company's employees and management team.

3. SWOT analysis: A strategic management framework that helps organizations build

and test their business strategies. It helps identify and compare an organization's strengths
and weaknesses with the external opportunities and threats of its environment.

4. Competitive advantage: Factors that allow a company to produce services or goods

better or for less expense than the competition. This can lead to more sales or higher
profit margins.

14
What Is Competitive Intelligence?
Competitive intelligence, sometimes referred to as corporate intelligence, refers to the ability
to gather, analyze, and use information collected on competitors, customers, and other
market factors that contribute to a business's competitive advantage. Competitive intelligence
is important because it helps businesses understand their competitive environment and the
opportunities and challenges it presents. Businesses analyze the information to create effective
and efficient business practices.

KEY TAKEAWAYS
 Competitor Intelligence is focused on understanding the movements and decisions of
competitors in your industry.
 It is meant to track how your competitors are developing products, selling services,
marketing, winning sales deals, and the overall competitiveness of other businesses
within your industry or landscape. It also gives you a comparison of your products
and services vs. competitors.
 It is critical for every team to understand and track what the competition is doing
with their coinciding department and how it is impacting their business, the market,
consumers, etc.
 Competitor Intelligence can be especially useful for marketing and sales teams to
understand how competitors are marketing their own products and services and
winning deals with prospects that you might have been targeting.
 The need for Competitor Intelligence arises as competition is increasingly getting
more difficult. Understanding your competitors’ overall strategy for winning deals
in your landscape can help your sales, marketing, product, and other departments
combat the strategies of your competitors and ultimately bring in more revenue for the
business.
 Challenges such as understanding where you place in the market, how you can win
new customers, and how you can keep loyal customers can all lead your business to
gather competitor intelligence.
 Competitor Intelligence is important to the success of your business so you can
remain competitive in your industry and potentially stay ahead of the curve.

Types of Competitive Intelligence

Competitive intelligence activities can be grouped into two main silos: tactical and
strategic.
 Tactical intelligence is shorter-term and seeks to provide input into issues such as
capturing market share or increasing revenues.
 Strategic intelligence focuses on longer-term issues, such as key risks and
opportunities facing the enterprise.

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 Elements of Competitive Intelligence:

1. Sector Intelligence: Sector intelligence tracks what is happening in large groups of

companies. Sectors are created by grouping companies with similar primary business
activities like Health Care, Financial, Information Technology, Communications, etc. It looks
at large-scale economic shifts and changes for these categorical companies.
Given each sector has unique characteristics and a different risk profile, sector intelligence
provides access to these trends.

2. Market Intelligence: Market intelligence is information collected on your entire market.

A market is a bit more specific than industry as it’s the place where buyers and sellers meet.
Market intelligence helps shine a light on position, competitors, customers, growth
opportunities and current or future problems a company could face. These insights help
partners identify and design a competitive strategy for the company’s products and services.

3. Innovation Intelligence: Disruption describes a process whereby a smaller company

wither fewer resources can successfully challenge established incumbent businesses.
Innovation intelligence is the process of solving problems by discovering and combining
ideas and methods in new ways.

4. Sales Intelligence: Sales intelligence is the use of data and software to help salespeople
focus their effort on buying ready accounts, generate leads, create customer profiles, better
manage their data, and more. Businesses change daily and sales need tools that constantly
monitor them.

5. ESG Intelligence: Environmental, Social, and Governance (ESG) Intelligence is focused

on understanding the impact your business practices have on the environment, social issues,
and government relations.
It tracks your environmental footprint, where your industry and competitors are headed with
sustainability, and the environmental impact. Social welfare and other humanitarian efforts
competitors are making, and relationships with foreign and national governments.

*DECISION MAKING
DEFINITION OF DECISION-MAKING
A decision may be defined as "a course of action which is consciously chosen from among a set
of alternatives to achieve a desired result." It represents a well-balanced judgment and a
commitment to action.
According to Trewatha & Newport, "Decision-making involves the selection of a course of
action from among two or more possible alternatives in order to arrive at a solution for a given

16
 problem".
CHARACTERISTICS OF DECISION MAKING
 Decision making implies choice: Decision making is choosing from among two or
more alternative courses of action. Thus, it is the process of selection of one solution
out of many available. For any business problem, alternative solutions are available.
Managers have to consider these alternatives and select the best one for actual
execution. Continuous activity/process:Decision-making is a continuous and dynamic
process. It pervades all organizational activity. Managers have to take decisions on
various policy and administrative matters. It is a never ending activity in business
management.
 Mental/intellectual activity: Decision-making is a mental as well as intellectual
activity/process and requires knowledge, skills, experience and maturity on the part
of decision- maker. It is essentially a human activity.
 Based on reliable information/feedback: Good decisions are always based on
reliable information. The quality of decision-making at all levels of the Organisation
can be improved with the support of an effective and efficient management
information system (MIS).
 Goal oriented process: Decision-making aims at providing a solution to a given
problem/ difficulty before a business enterprise. It is a goal-oriented process and
provides solutions to problems faced by a business unit.
 Means and not the end: Decision-making is a means for solving a problem or for
achieving a target/objective and not the end in itself.
 Time-consuming activity: Decision-making is a time-consuming activity as
various aspects need careful consideration before taking final decision. For
decision makers, various steps are required to be completed. This makes decision-
making a time consuming activity.
 Pervasive process: Decision-making process is all pervasive. This means
managers working at all levels have to take decisions on matters within their
jurisdiction.
ADVANTAGES OF DECISION MAKING
 Decision making is the primary function of management: The functions of
management starts only when the top-level management takes strategic decisions.
17
Without decisions, actions will not be possible and the resources will not be put to use.
Thus decision-makingis the primary function of management.
 Decision-making facilitates the entire management process: Decision-making
creates properbackground for the first management activity called planning. Planning
gives concrete shapeto broad decisions about business objectives taken by the top-level
management. In addition, decision-making is necessary while conducting other
management functions such as organizing,staffing, coordinating and communicating.
 Decision-making is a continuous managerial function: Managers working at all levels will
have to take decisions as regards the functions assigned to them. Continuous decision making is a
must in the case of all managers/executives. Follow-up actions are not possible unless
Decisions are taken.
 Decision-making is essential to face new problems and challenges: Decisions
are required to be taken regularly as new problems, difficulties and challenges develop
before abusiness enterprise. This may be due to changes in the external environment.
New products may come in the market, new competitors may enter the market and
government policies may change. All this leads to change in the environment around the
business unit. Such change leads to new problems and new decisions are needed.
 Decision-making is a delicate and responsible job: Managers have to take quick
and correct decisions while discharging their duties. In fact, they are paid for their skill,
maturity and capacity of decision-making. Management activities are possible only when
suitable decisions are taken. Correct decisions provide opportunities of growth while
wrong decisions lead to loss and instability to a business unit.

STEPS INVOLVED IN DECISION MAKING PROCESS

Decision-making involves a number of steps which need to be taken in a logical manner. The
scientific method of decision-making involves the following six steps:
a. Defining / Identifying the managerial problem,
b. Analyzing the problem,
c. Developing alternative solutions,
d. Selecting the best solution out of the available alternatives,
e. Converting the decision into action, and
f. Ensuring feedback for follow-up.

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The figure given below suggests the steps in the decision-making process:-

 Identifying the Problem: Identification of the real problem before a business

enterprise is the first step in the process of decision-making. It is rightly said that a
problem well- defined is a problem half-solved. Information relevant to the problem
should be gathered so that critical analysis of the problem is possible. This is how
the problem can be diagnosed.
 Analyzing the Problem: After defining the problem, the next step in the decision-
making process is to analyze the problem in depth. This is necessary to classify the
problem in order to know who must take the decision and who must be informed about
thedecision taken. Here, the following four factors should be kept in mind: (i) Futurity
of the decision, (ii) the scope of its impact, (iii) number of qualitative
considerations involved, and (iv) uniqueness of the decision.
 Collecting Relevant Data: After defining the problem and analyzing its nature, the
next step is to obtain the relevant information/ data about it. There is information flood
in the business world due to new developments in the field of information
technology. All available information should be utilized fully for analysis of the problem.
This brings clarity to all aspects of the problem.
 Developing Alternative Solutions: After the problem has been defined,
diagnosed on the basis of relevant information, the manager has to determine
available alternativencourses of action that could be used to solve the problem at hand. Only
realistic alternatives should be considered. It is equally important to take into account time and
costconstraints and psychological barriers that will restrict that number of alternatives

 Selecting the Best Solution: After preparing alternative solutions, the next step
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 in the decision-making process is to select an alternative that seems to be most rational for
solving the problem. The alternative thus selected must be communicated to those who are
likely to be affected by it. Acceptance of the decision by group members is always desirable
and useful for its effective implementation.
 Converting Decision into Action: After the selection of the best decision, the next
step is to convert the selected decision into an effective action. Without such action,
the decision will remain merely a declaration of good intentions. Here, the manager
has to convert 'his decision into 'their decision' through his leadership.
 Ensuring Feedback: Feedback is the last step in the decision-making process. Here,
the manager has to make built-in arrangements to ensure feedback for continuously
testing actual developments against the expectations. It is like checking the
effectiveness of follow-up measures. Feedback is possible in the form of organized
information, reports and personal observations. Feedback is necessary to decide
whether the decision already takenshould be continued or be modified in the light of
changed conditions.
TYPES OF DECISIONS
 Programmed and Non-programmed Decisions
Programmed or structured are those decisions, which are well defined and some
specified procedure or some decision rule might be applied to reach a decision. Such
decisions are routine and repetitive and require little time for developing alternatives in
the design phase. Programmed or structured decisions have traditionally been made
through habit, by operating procedures or with other accepted tools. Whereas, Non-
programmed Decisions, which are not well defined and have not pre-specified
procedures decision rule are known as unstructured or non-programmed decisions.

 Routine ad Strategic Decisions

These decisions are also known as Operating Decisions. They occur repetitively and
are regular in nature. These decisions are made to govern the day-to- day operations of
the businesses. These decisions are generally taken at lower levels of the management
whereas strategic decisions are also known as Policy decisions. These are not repetitive
in nature nor follow a routine manner. These are related to the long-term functioning of
the company. The making of these decisions is guided by policy manuals but require

20
high expertise and strategic knowledge. Since their impact is organization-wide they are
taken athigher level of management.
 Organizational and Personal Decisions
Organizational decisions are made to further the interests of the organization. Such
decisions are made by managers in their official capacity. These decisions are based
on rationality, judgment and experience whereas Personal Decisions while making
personal decisions, personal interests are kept in mind. Such decisions are made by
managers on their own behalf. There is no scope for delegation of such decisions
in management.
 Individual or Group Decisions
Individual Decision Making: without a group's input or a decision made regardless of the
group's opinion is, naturally, an individual decision. This is the more traditional decision making
approach and can work effectively for a manager when the group's input is not required or in
certain cases, desired.
Group Decision Making: There are several models of group decision making that you can put
to use. Two examples are consensus and consultation. Consensus decision making involves
posing several options to the group and using the most popular option to make a decision.
Consultation takes the opinions of the group into consideration when making a decision. Both
methods require the group's participation and call for a manager who respects the opinions and
input of the group in the decision making process.

*BENCHMARKING:

What is benchmarking?
Benchmarking in business means measuring your company’s quality, performance and
growth by analyzing the processes and procedures of others.
Benchmarking is the process of comparing your business’s performance to that of others in
your industry. This can help you identify areas where you shine and need improvement.
Benchmarking has many benefits, including improving productivity, increasing efficiency,
and gaining a competitive edge. Read on to learn more about benchmarking and how it can
benefit your business.
The ultimate goal of benchmarking is continuous improvement, something all businesses
should aim for. Comparing your business to others can help you generate ideas that you

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can adopt to get ahead.
Features of benchmarking
1. Good impact on customer’s needs: By using various benchmarking methods, an
organization can gain valuable customer feedback. This is because it helps them customize their
products or services to meet expectations better and speed up delivery timeframes to maintain
high levels of quality throughout all aspects involved with providing these goods/services.
2. Helps in raising company standards: Benchmarking allows companies to see where they
stand against their competition and determine if there are any areas for improvement. For
example, comparing an organization’s output quality with that of other similar businesses in
different industries or regions can help them identify what equipment would better suit
production needs depending on where you’re located geographically speaking.

3. Betterment in learning methodologies: An organization must keep up with the changing

market and learn new ideas. Benchmarking helps them do just that by helping their employees
adopt better work models, methods & practices.

4. Get inspiration from the pioneers: Benchmarking provides a platform for employees to
learn from industry leaders and take inspiration from their success. For example, benchmarking
shows the different stories of successful companies and encourages the employees to do more
extensive innovations.

5. Strengthening the weakness: Benchmarking is a process of measuring and analyzing

performance, quality, or efficiency to make improvements. When something isn’t up-to-standard,
it helps organizations recover from mistakes by throwing some light on areas where changes
need to be made while also generating new ideas that can improve losses due to that issue.

6. Enhances the learning experience: Benchmarking is a way to motivate your employees and
ensure they stay on top of their game. Benching new techniques and gathering information about
educational standards in other organizations all these things help keep people sharper.

7. Keeps in pace with new technology: Benchmarking is for organizations to stay ahead of the
curve and adopt new technologies that are trendy in this day and age. It also helps them see
which ones their competitors have already started using so they can get an idea of how successful
those programs were overall.

8. Strives for the organization’s force on success: By benchmarking, an organization can see
how they stack up against its competitors and what other companies in similar industries are
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doing. This helps them stay focused on their overall well-being and externally by displaying
market demands for products or services alongside customer expectations. This will make it
easier to know where improvements need making so that these issues won’t arise again down
future lines.
9. Works for employees’ career growth: When organizations benchmark their employees, it
helps them to thrive. Employees are encouraged and supported for career growth by encouraging
better outputs from previous products and helping mistakes committed during the development
of past projects.

Types of business benchmarking:

1. Internal benchmarking
Internal benchmarking is all about improving your business by comparing it to historical
data. Whether you’re comparing organizational departments or different branch locations,
you can use internal benchmarking to uncover the best, most efficient practices and share
them across the company. According to Boydas, internal benchmarking can help eliminate
waste of both time and money in a business.

2. Competitive OR External benchmarking

As the name suggests, competitive benchmarking is about setting certain goals based on
what your competitors are doing. If you study the practices and standards of similar businesses
to match — or ideally exceed — the industry status quo, your business can gain a competitive
edge. By comparing the metrics and practices of one organization to others, we can see how our
company measures up. What you need: Custom benchmarking is an approach that requires a
significant amount of time and effort. Getting all the necessary parties on board may be
challenging, but this type helps you measure your company’s performance in ways not currently
available through more traditional methods.

3. Performance Benchmarking
Performance Benchmarking involves collecting and comparing quantitative data (i e.,
measures or key indicators) that help identify where an organization stands in comparison
with other firms on similar levels of success, growth potentials, etc.
What you need: Standard measures and KPIs and a means of extracting, collecting, and
analyzing that data.
What you get: Data informs decision-making. This form of benchmarking is usually the first step
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organizations take to identify performance gaps.

4. Practice Benchmarking: Practice Benchmarking involves collecting and analyzing

qualitative data on how an activity is conducted, such as people’s experiences with
processes or technology used in the process.

5. Process benchmarking: Process Benchmarking is a type of corporate rivalry where

employees from other top-performing organizations visit your site and analyze how you perform
tasks. The process can be done through research or workshops conducted by those participating
in the competition.

6. Strategic benchmarking: The process of strategic benchmarking can be used to help

companies find the best strategies and compare them. This way, members will know which
method they should choose if there is more than one option available for new ideas that need
consideration to succeed and thrive over time.

7. Product benchmarking: Product benchmarking is an integral part of any company that wants
to stay ahead in their industry and know what others are doing well or not concerning
performance ability, features, etc.

8. Corporate benchmarking: Corporate benchmarking often includes comparing various

divisions, but it can also include basic studies that help create a more efficient working model for
all employees within your company. For example, corporate benchmarking would compare other
organizations’ marketing divisions, finance, research team, testing squad, etc., to improve overall
efficiency.
9. Global benchmarking: Global benchmarking is a way to see how your company stacks up
against other organizations worldwide. It can help you identify areas where they’re stronger and
weaker so that the best practices from one country might not work elsewhere.
Collaborative benchmarking
10. Collaborative benchmarking happens within organizations, where the IT team
collaborates with other stakeholders. Various collaboration strategies may also occur during
this process – discussing different approaches depending on which type(s)of information
technology system. This type of benchmarking is widespread among all industries.

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Benefits of benchmarking in business
Businesses that make benchmarking a regular practice can accomplish the following:
 Keep improving internal operations. Benchmarking your processes and procedures,
especially against internal standards, can help your team become more efficient and
productive year over year.
 Understand what’s working and what isn’t. A deep, thorough analysis of your business’s
past performance will allow you to identify trends and patterns that you may not have noticed
as they were happening. Looking at this data will give you a clear picture of what behaviors
and practices improve overall business results and which ones don’t.
 Adopt or improve upon competitors’ practices. When you study your competition, you
begin to understand what they’re doing that makes them successful, as well as areas where
they falter. If you adapt competitors’ best practices to your organization’s needs and deviate
from the things customers or clients don’t like, you can optimize your position in the market
and better appeal to your target audience.
 Reduce costs by increasing efficiency. Benchmarking is most often used to improve
performance through efficiency. Cutting out waste in your processes, be it monetary costs or
time and effort spent, will help you streamline your operations and ultimately help you retain
more of your revenue.
 Focus on practices and offerings that promote customer satisfaction and
loyalty. Gathering feedback and data from customers (either your own or your competitors)
will give you greater insight into what they like and don’t like, and what you can do to keep
earning their business in the future.

PROCESS OF BENCHMARKING:
1. Plan out what you want to benchmark.
Benchmarking begins with identifying what you want to measure. Whether that’s salary,
sales, team development or another area of growth, you should define the activities you’re
benchmarking and the key metrics you’ll use to track progress.
2. Conduct research to collect relevant data.
Once you know what you want to measure, begin speaking with employees, competitors,
customers and other business stakeholders who may be involved or impacted. Initiate one-on-one
or group conversations or collect survey responses from these parties to gain valuable feedback
that will inform your benchmarking process.

3. Analyze the data to assess where you are and where you want to be.
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Use your research and gathered data to figure out where your current performance sits compared
to other companies or departments and determine an appropriate and realistic goal for
improvement. Lay out your data in an easy-to-digest format (e.g. graphs or charts) to give
yourself a holistic picture of any gaps in your performance and how far you’ll need to go to meet
your desired benchmark.
4. Develop an action plan.
This is the phase of the benchmarking process in which you’ll develop actionable steps you and
your stakeholders can take to reach your goals. Defining success and an action plan upfront gives
you a clear path to hitting your benchmarks. A good place to begin is to leverage common goal-
setting approaches like SMART (specific, measurable, actionable, relevant and time-bound) and
HEART (habit-forming, emotional, actionable, realistic and time-bound).

5. Monitor your progress.

At regular intervals, check the progress your team is making against the defined goals in your
action plan. This may be weekly, monthly, quarterly or annually, but it’s important to track your
metrics consistently. If you’re meeting your benchmarks, it means your plan has been successful
and you should continue. If you’re not, you may need to revisit your plan and course correct.
While these steps can be adapted to many different business operations, your company may want
to develop its own unique benchmarking process based on the specific goals you want to reach.
Depending on your current state and where you want to go, some steps may be more involved or
require external partners to help.

*FORECASTING:
What Is Forecasting? Forecasting is a technique that uses historical data as inputs to make
informed estimates that are predictive in determining the direction of future trends. Businesses
utilize forecasting to determine how to allocate their budgets or plan for anticipated expenses for
an upcoming period of time.

Forecasting is important because it helps businesses make informed decisions

about: Budgeting, Planning, Estimating future growth, Production, Financing.

KEY TAKEAWAYS
 Forecasting involves making predictions about the future.
 In finance, forecasting is used by companies to estimate earnings or other data for subsequent
periods.
26
 Traders and analysts use forecasts in valuation models, to time trades, and to identify trends.
 Forecasts are often predicated on historical data.
 Because the future is uncertain, forecasts must often be revised, and actual results can vary
greatly

SOME MAIN FORECAST METHODOLOGIES INCLUDE:

1. Qualitative Techniques
Qualitative forecasting models are useful in developing forecasts with a limited scope. These
models are highly reliant on expert opinions and are most beneficial in the short term. Examples
of qualitative forecasting models include interviews, on-site visits, market research, polls,
and surveys that may apply the Delphi method (which relies on aggregated expert
opinions).

2. Time Series Analysis

A time series analysis looks at historical data and how various variables have interacted
with one another in the past. These statistical relationships are then extrapolated into the future
to generate forecasts along with confidence intervals to understand the likelihood of the actual
outcomes falling within that scope. As with all forecasting methods, success is not guaranteed.

3.The Box-Jenkins Model is a technique designed to forecast data ranges based on inputs
from a specified time series. It forecasts data using three principles: autoregression,
differencing, and moving averages. Another method, known as rescaled range analysis, can be
used to detect and evaluate the amount of persistence, randomness, or mean reversion in time
series data. The rescaled range can be used to extrapolate a future value or average for the data to
see if a trend is stable or likely to reverse.

4.Econometric Inference
Another quantitative approach is to look at cross-sectional data to identify links among
variables—although identifying causation is tricky and can often be spurious. This is
known as econometric analysis, which often employs regression models. Techniques such as
the use of instrumental variables, if available, can help one make stronger causal claims.
For instance, an analyst might look at revenue and compare it to economic indicators such
as inflation and unemployment. Changes to financial or statistical data are observed to
determine the relationship between multiple variables. A sales forecast may thus be based on
several inputs such as aggregate demand, interest rates, market share, and advertising budget
(among others).
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 What are the forecasting techniques?
There are several forecasting methods that can be broadly segmented as either qualitative or
quantitative. Within each category, there are several techniques at one’s disposal.
 Under qualitative methods, techniques may involve interviews, on-site visits, the Delphi
method of pooling experts’ opinions, focus groups, and text analysis of financial documents,
news items, and so forth.
 Under quantitative methods, techniques generally employ statistical models that look at
time series or cross-sectional data, such as econometric regression analysis or causal
inference (when available).

*DIRECTING:
Meaning:
Directing refers to a process or technique of instructing, guiding, inspiring, counselling, overseeing
and leading people towards the accomplishment of organizational goals. It is a continuous managerial
processthat goes on throughout the life of the organization.

Directing concerns the total manner in which a manager influences the actions
of subordinates. It is the final action of a manager in getting others to act
after all preparations have been completed. It consist of the following elements:
1. Issuing orders and instructions
2. Continuing guidance and supervision of subordinates
3. Motivating subordinates to work hard for meeting the expectation of management.
4. Maintaining discipline and rewarding those who perform well
5. Providing leadership to subordinates
CHARACTERISTICS OF DIRECTING
• Continuing Function
• Pervasive Function
• Creative Function
• Linking function
• Management of Human Factor
SCOPE OF DIRECTING

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• Initiates action
• Ensures coordination
• Improves efficiency
• Facilitates change
• Assists stability and growth
Scope of Directing

 Directing informs the human beings in the organization what he should do, how he
should do, and when he should do. The scope of the directing in the organization is
summarized as follows are asked how the ideas could be combined or improved
 The scope or importance of the directing in the organization lies in the fact that every action
is initiated through direction.

 Directing conveys management perspective of the organization to the individuals and

motives them to function in the desired way to meet the organizational objective.
 Directing integrates the employee's individual efforts to make it effective to achieve
organization objectives.
 Without having proper motivation, leadership and communication, individual's
capability and potential may not be fully utilized.
 Any changes in the society, where the organization exists, will affect the organization
structure and the individuals within it. Directing with its elements provide stability in
the organization and maintain balances in the different parts of the organization

PRINCIPLES OF DIRECTING
o Harmony of objectives:
Individual join the organisation to satisfy the psychological and physiological needs. They are expected to
work for the achievement of the organisation objectives and they will perform their task better if they feel
that if it will satisfy their personal goals
o Maximum individual contribution:
Organisational objectives are achieved at the optimum level when every individual in the organisation
makes maximum contribution towards them
o Unity of command
Furniture get Orders and instructions from one superior only if he is made accountable to bosses
simultaneously there will be confusion conflict disorder and indiscipline of the organisation
o Appropriate techniques
The manager should use correct direction techniques to ensure efficiency of direction the techniques used
should be suitable to the superior the subordinate and the situation

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 o Direct supervision:
More effective when there is an direct personal contact between a superior and his subordinates. Such
direct contact improve the moral of commitment of employees
o Strategic use of informal organisation:
Management should try to understand and make use of informal groups to strengthen formal and
official relationships this will improve the effectiveness of direction
o Managerial communication:
A good system of communication between the superior and a subordinate help to improve mutual
understanding
o Comprehension:
Communication of Orders and instruction is not sufficient managers should ensure that the coordinates
correctly understand what they are to do and how when they are to do.

SIGNIFICANCE OF DIRECTING
1. It Initiates Actions - Directions is the function which is the starting point of the work
performance of subordinates. It is from this function the action takes place, subordinates
understand their jobs and do according to the instructions laid. Whatever are plans laid, can be
implemented only once the actual work starts. It is there that direction becomes beneficial.
2. It Integrates Efforts - Through direction, the superiors are able to guide, inspire and instruct
the subordinates to work. For this, efforts of every individual towards accomplishment of goals
are required. It is through direction the efforts of every department can be related and integrated
with others. This can be done through persuasive leadership and effective communication.
Integration of efforts bring effectiveness and stability in a concern.
3. Means of Motivation - Direction function helps in achievement of goals. A manager makes
use of the element of motivation here to improve the performances of subordinates. This can be
done by providing incentives or compensation, whether monetary or non - monetary, which
serves as a “Morale booster” to the subordinates Motivation is also helpful for the subordinates to
give the best of their abilities which ultimately helps in growth.
4. It Provides Stability - Stability and balance in concern becomes very important for long term
sun survival in the market. This can be brought upon by the managers with the help of four tools
or elements of direction function - judicious blend of persuasive leadership, effective
communication, strict supervision and efficient motivation. Stability is very important since that
is an index of growth of an enterprise. Therefore a manager can use of all the four traits in him so

30
that performance standards can be maintained.
5. Coping up with the changes - It is a human behaviour that human beings show resistance to
change. Adaptability with changing environment helps in sustaining planned growth and
becoming a market leader. It is directing function which is of use to meet with changes in
environment, both internal as external. Effective communication helps in coping up with the
changes. It is the role of manager here to communicate the nature and contents of changes very
clearly to the subordinates. This helps in clarifications, easy adaptions and smooth running of an
enterprise. For example, if a concern shifts from handlooms to powerlooms, an important
change in technique of production takes place. The resulting factors are less of manpower and
more of machinery. This can be resisted by the subordinates. The manager here can explain that
the change was in the benefit of the subordinates. Through more mechanization, production
increases and thereby the profits. Indirectly, the subordinates are benefited out of that in form of
higher remuneration.
6. Efficient Utilization of Resources - Direction finance helps in clarifying the role of every
subordinate towards his work. The resources can be utilized properly only when less of wastages,
duplication of efforts, overlapping of performances, etc., doesn’t take place.
7. Ensures coordination
8. Improves efficiency

TECHNIQUES OF DIRECTING
1. Delegation
2. Supervision
3. Orders and instructions
4. Motivation
5. Leadership

*Human Factors:
Human factors is the study of how people use technology and interact with systems and
work environments. It also involves the study of human abilities, limitations, and
expectations.
Human factors can also be referred to as human factors psychology and human factors
engineering. The term "human factors engineering" (HFE) refers to the application of
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 human factors principles to the design of devices and systems.
Some examples of human factors include:
 Fatigue
 Breakdown of machines
 Lack of professional knowledge
 Negligence of potential risks

This definition includes three interrelated aspects that must be considered: the job, the
individual and the organisation:
 The job/ the Work: including areas such as the nature of the task, workload, the working
environment, the design of displays and controls, and the role of procedures. Tasks
should be designed in accordance with ergonomic principles to take account of both
human limitations and strengths. This includes matching the job to the physical and the
mental strengths and limitations of people. Mental aspects would include perceptual,
attentional and decision making requirements.
Work factors
 illogical design of equipment and instruments

 constant disturbances and interruptions

 missing or unclear instructions

 poorly maintained equipment

 high workload

 noisy and unpleasant working conditions.

 The individual: including his/her competence, skills, personality, attitude, and risk
perception. Individual characteristics influence behaviour in complex ways. Some
characteristics such as personality are fixed; others such as skills and attitudes may be changed
or enhanced.
People factors

 low skill and competence levels

 tired staff

 bored or disheartened staff

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  individual medical problems

 The organisation: including work patterns, the culture of the workplace, resources,
communications, leadership and so on. Such factors are often overlooked during the design
of jobs but have a significant influence on individual and group behaviour.
Organisation factors
 poor work planning, leading to high work pressure

 lack of safety systems and barriers

 inadequate responses to previous incidents

 management based on one-way communications

 deficient co-ordination and responsibilities

 poor management of health and safety

 poor health and safety culture.

Other Aspects of Human factors:

1. Human factors is about ensuring a good ‘fit’ between people, the equipment they use, the
task they carry out and the environment in which they work. Effective use of human
factors will make work safer, healthier and more productive.
2. In other words, Human factors is concerned with what people are being asked to do (the
task and its characteristics), who is doing it (the individual and their competence) and where
they are working (the organisation and its attributes), all of which are influenced by the
wider societal concern, both local and national.
3. Some examples of human factors include: Physical, Cognitive, Social, Cultural,
Emotional.
4. One of the areas where human factors can contribute is in preventing human errors
(or reducing the likelihood of errors). If aspects of the Work, People and Organisation are
not optimal, then we can expect a decline in human performance and an increase in human
errors. Human factors approach aims to set people up to succeed, by considering the wide range of
factors that influence their actions and decisions, and by matching Work demands to the capabilities
and limitations of People.
Human factors will help to address aspects of human performance such as the following:
 Why do people make mistakes and other types of human errors? Are these random

33
events, or can we identify factors that make them more likely? The prevention measures
will depend on the exact type of human error.
 Why do people break the rules? Did the person break the rule intentionally, or is it

because they didn’t know about the rule? Perhaps the rule was unworkable in practice, or a
person had competing demands on their time.
 Why do people take risks? People tolerate different levels of risk and sometimes people

change their behaviours in order to increase, or reduce, the perceived risk. Behavioural
safety approaches aim to influence risk taking behaviours.
 Why do accidents happen? Accidents are usually the result of a combination of

contributory factors. Human factors approaches can help to better understand accidents that
have occurred, and also help to prevent future events. In other words, human factors can
help to identify what went wrong, and predict what could go wrong.

*Creativity and Innovation:

What is Innovation?
Of Innovation, author and educator Peter Drucker said,
“Innovation is the specific function of entrepreneurship, whether in an existing business, a
public service institution, or a new venture started by a lone individual in the family
kitchen. It is the means by which the entrepreneur either creates new wealth-producing
resources or endows existing resources with enhanced potential for creating wealth.”
Peter Drucker
Through Innovation, we bring ideas into the world so they can make a tangible impact. The
end result of true Innovation is something that can be marketed as a product or service.
Types of Innovation:
 Incremental Innovation: Adding features or capabilities to an existing product one at a

time
 Architectural Innovation: Applying existing technology or expertise to a new market.

 Disruptive Innovation: Applying new technologies, processes, or business models to

existing industries.
 Radical Innovation: The rarest of all innovation types, entirely new technologies or

products are created for entirely new markets.

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What is Creativity?
Artists, philosophers, educators, and psychologists have long tried to write a simple
definition of creativity. Its very nature is elusive, which makes describing it a challenge. We
know it’s the process through which something new is formed, and typically, most
definitions assume value is included with the new creation.
We agree that there are four different types of Creativity, each a different blend of
specific attributes and approaches.
Types of Creativity
 Deliberate and Cognitive: The Creativity of planning and expertise. Creativity with a

purpose.
 Deliberate And Emotional: Where logic meets emotion. The Creativity of both an open

mind and an open heart.

 Spontaneous and Cognitive: Knowledge relies on inspiration for a “Eureka!” moment.

The Creativity of preparation and perfect timing.

 Spontaneous And Emotional: The Creativity of the Unconscious. Ideas arrive when we

least expect them, so we have to be ready.

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 Relationship between Creativity & Innovation:
 Creativity is an individual ability that can lead to an idea or
invention. Innovation is the process of converting that idea or invention into a
marketable product or service.
 Creativity is centered around original thought and knowledge, and is an
integral part of idea generation. Innovation is used to turn the creative idea
into a viable solution.
 Innovation leverages both imagination and creativity to improve what exists
today and create a better future.
 Understanding the distinction between creativity and innovation is essential for
organizations and individuals looking to remain competitive in their respective
fields

EXAMPLE:
Apple Inc’s famous boss Steve Jobs recently uncovered yet another series of i — devices
namely i-Pad. I-Pad is a kind of a electronic note pad that seeks to revolutionizes how media
content is browsed. The world has been waiting for a technology product that can be used as a
mobile phone as well as a computer. Finally Apple came up with the i-pad and surprised many
in the world with the launch of a tablet computer-the i-Pad that represents a new style of media
use in the present age. The i-pad is a breakthrough and shall form a new definition for digital
devices. It shall start a new category of digital products. It has given the customers more than

36
what they had expected and beyond their imagination.
Innovation can be achieved strategically through a process of creativity. THERE ARE 4
STEPS THAT HELP GENERATE IDEAS AND CONCEPTS. THIS INCLUDES:
1. getting the info
2. thinking about it
3. realization, eureka factor
4. evaluation/ implementation (link to innovation

THREE LEVELS OF CREATIVITY

1. CREATIVITY /DISCOVERY
This is the moment when the creative person comes to a discovery. It’s a genuine idea that
may come unexpectedly, but may also be the result of a lengthy thought process. For example,
you get an idea to create a product that fills a gap in the market. The need for creativity will
not stop at this point. It’s the thread that connects the entire process.

2. INVENTION
Invention is creativity brought to a higher level. For example, Mark Zuckerberg’s creative idea
led to Facebook. But this is often something that would’ve still happened. If Zuckerberg didn’t
create Facebook, someone else would have created something similar. If you don’t fill in this
market gap, someone else eventually will.

3. CREATION
Now, this is the highest form of creativity. Mozart created music no one else would’ve
created. When you relate creation to business, it’s something that only your organization is
capable of. Even if the company does not reach this point, it may still be successful.
Innovation, however, is necessary for a business to thrive.

HOW TO BOOST CREATIVITY AND INNOVATION AMONG EMPLOYEES

1. INSPIRE YOUR PEOPLE TO LEARN
Before they can think of something that’s not available in the industry, they must first know
everything about the industry. Truly creative people don’t wait for bursts of creativity to hit
them out of nowhere. They learn and observe the world around them with all their senses.
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Therefore, you should inspire your employees to continuously expand their knowledge. Your
organization should organize training sessions and pay for online courses on individual bases.

2. FOCUS ON HIRING CREATIVE INDIVIDUALS

“What have you invented so far?” is not a good question to ask during an interview. Maybe
someone still hasn’t invented anything special, but they may still have the creative foundation
to do so. Instead, you should evaluate their creativity.
You may do so by asking tricky questions, such as: “What would you change if you were the
boss of this company?” Think of several critical thinking questions, so you can see how this
person’s mind works under pressure.

3. BRING THE TEAM TOGETHER

Put several creative minds in a room and see what happens. You just need to give them a
trigger, such as an issue you’d like to solve. Let them be flexible enough to express all ideas
and inspire them to build on each other’s ideas.

*Harmonization of Objectives:
Meaning of Harmonization: Harmonization means working on those areas which are
complementary in order to have the plans working together for the achievement of an
overall strategic objective. Harmonization helps different departments in local
authorities share the same vision, work together and optimize the use of resources.
Harmonization is a process of change that continuously searches for mutual recognition. It
means working on those areas which are complementary in order to have the plans working
together for the achievement of an overall strategic objective.

Harmonization of Objectives:
Meaning: Harmonizing objectives is a process that involves synchronizing various elements
within an organization. This includes its goals, strategies, processes, and resources. The
goal is to create a cohesive and integrated approach towards achieving desired outcomes.
The principle of Harmony of Objectives states that management should harmonize the
individuals' objectives with organizational objectives. This connection is built on the idea of
unity, which is when the individual's purpose is connected to the organization's.
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 Here are some objectives of harmonization:
 To move accounting and reporting away from total diversity by finding shared solutions

 To help different departments in local authorities share the same vision, work together, and

optimize the use of resources

 To make systems or laws the same or similar in different companies, countries, etc

Broader Meaning of Harmonizing Objectives:

 When harmonizing purpose, individuals connect the corporate purpose with
their personal purpose, finding plural sources of meaning and a sense of purpose in
their daily work.
 Harmonization enhances the understanding of how personal and organizational
purposes support each other by dynamically exchanging meaning (purpose fluidity)
as well as intersecting it to enrich each other (purpose synergy).
 This requires overcoming the “myth of two separate worlds” in which work identities
are completely disconnected from non-work identities. In the two-sided notion of
purpose, individuals authentically receive meaning from the purpose of the
organization and the organization authentically receives meaning from the
purpose of each employee. It is related to what some call the “ideological currency”
that enhances the psychological contract between the employee and the organization.

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Element of Harmoning Objectives:
1. Nurturing Fluidity:
 Purpose fluidity explains how individuals and organizations exchange meaningful
representations of purpose at work, enhancing the sense of purpose when flowing
dynamically between personal and organizational purposes.
 In other words, fluidity is not just using one representation of purpose (personal or
organizational), but combining both at the same time, flowing from the personal to
the organizational and vice versa, as is shown in Fig. 2.1.
 Fluidity then is based on what an organization’s purpose means to the individual as
well as what the individual’s purpose means to the organization
 Keeping the dynamic fluidity “alive” is about what some have called “making every-
day-work meaningful.”16 And since fluidity goes in two directions, it is much like
friendship or trust.
 We can trust someone, but if we do not feel that person’s corresponding trust in us,
our own trust will be short lived. The same happens with purpose fluidity. If
individuals do not see that the organization values their personal purpose in life,
sooner than later they will become distant to their organization’s purpose and
purpose fluidity will be lost.
 Eg: This is case, of Novo Nordisk, a company that makes medicines for diabetics, and
requires that all new employees spend a day with a diabetes patient. It is also the case
for ISS Facility Services, where top managers spend a day in a year performing
frontline positions, like cleaning or maintenance, in the premises of their clients. These
practices are source of what some call “a beneficiary contact,” helping individuals to
experience and gain greater consciousness of their organization’s purpose

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2. Facilitating Synergy:
 Purpose synergy is found at the junction of company purpose and personal purpose.
Purpose synergy is the place of overlap between the company and the individual, where
the interests of the company and its individual employees combine to reach its most
perfect form.
 Purpose synergy reveals what the person best bringsto the company and vice
versa. Thus, synergy occurs in part of the companypurpose as well as the
individual’s life purpose.
 Eg: Consider, for example, the case of Alpha Omega, a high-tech medical device
company in Israel devoted to the purpose of improving peoples’ lives. Its
founders, Imad and Reem Younis, have been committed, from a very young age,
to the purpose of developing work environments where Jews and Arabs can work
together in harmony. And in leading their company, they incorporate this personal
purpose into the corporate purpose. They hire Jews and Arabs alike, employees
who not only excelled at their work, but also share in a dream of creating
inclusive work environments
The Joint Effect of Fluidity and Synergy
Fluidity and synergy have common drivers, but are different from each
other. Fluidity allows the connecting of personal and organizational purposes
with-out necessarily identifying solely with one or the other. With synergy, how-
ever, both personal and organizational purposes partly or fully identify with one
another, meaning that the organization incorporates the purpose of the individuals
and vice versa. We could say that fluidity helps organizational and personal
purposes get closer, while synergy integrates them. Fluidity helps to create unity,
synergy is the result of the unity itself

*LEADERSHIP & TYPES

Meaning: Leadership is the ability of a person or group to influence and guide
others, such as followers, team members, or members of an organization or
society. Leadership is often associated with a person's title, seniority, or ranking in
a hierarchy. Leaders often use a combination of different leadership styles, based on

41
 their experience and abilities, their team members' needs, and the organization's goals.
Some examples of leadership skills include:
 Being flexible

 Building trust

 Empathizing

 Communicating

 Giving and receiving feedback

 Actively listening

 Being patient

 Solving problems

 Delegating

 Resolving conflict tactfully

 Managing time wisely

 Maintaining consistency

 Adapting

Effective leadership can lead to the following benefits for organizations:

 Increased productivity among employees

 Improved employee engagement

 More innovation and creativity

 Stronger decision-making

 Continuously talent development

 Positive and strong organizational culture

Some common leadership challenges include:

 Providing inspiration

 Developing others

 Leading change

 Handling different perspectives

 Dealing with imposter syndrome

 Managing a team

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Types of Leadership:
1. Democratic Leadership
A democratic leader makes decisions based on their team’s opinion and feedback.
In simpler words, they get everyone involved in the decision-making process.
However, this type of leadership cannot be used in the long run because of drawbacks
like losing the leader’s authority, debates, and miscommunication between team
members. Here are some scenarios in which you can adopt a democratic
leadership style:
 New project that requires constant brainstorming

 Solve complex business problems

 Tight-knit or small organisations like start-ups, etc.

Here are some features of this leadership style

 Transparent conversations

 Everyone’s opinion counts

 Values collaboration and teamwork

 Encourages discussions

2. Autocratic Leadership
This is precisely the opposite of democratic leadership. The opinions of team
members are not considered while making any business decision. Instead, leaders
expect others to adhere to their decisions, which is not sustainable in the long run.
3. Laissez-faire Leadership
Laissez-faire means “let them do”. This leadership style is the least intrusive and
ensures that the decision-making authority lies with the team members.
This leadership style empowers team members and holds them accountable for their
work. This motivates many team members to put their best foot forward, improving
the organisation’s efficiency and productivity.
4. Strategic Leadership
Strategic leadership is when leaders use their skills and capabilities to help team
members and organisation achieve their long-term goals. Strategic leaders strive to
get the best out of people or situations.
Here are some unique traits of strategic leaders
• They are interested in the well-being of others
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•They are open-minded
• They are self-aware
• They are good at interpersonal communication
5. Transformational Leadership
Transformational leaders inspire others to achieve the unexpected. They aim to
transform and improve team members’ and organisations’ functions and
capabilities by motivating and encouraging them.
6. Transactional Leadership
This type of leadership is task-oriented, which means team members who meet the
leader’s expectations will be rewarded, and others will be punished. It is a prevalent
leadership style based on the action-and-reward concept.
7. Coach-Style Leadership
This leadership style focuses on identifying and nurturing a team member’s
strengths and weaknesses. A coaching leader develops strategies that emphasise
team members’ success. Though this is similar to strategic and democratic leadership
styles, the focus here is more on the individual.
8. Bureaucratic Leadership
This kind of leadership style sticks to the rules of an organization. For example, they
might listen to their team members’ opinions while deciding.
Here are some of the benefits of this type of leadership
• Lowers the risk of favouritism among team members
• Increases creativity for some employees

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**DIRECTING
Directing refers to a process or technique of instructing, guiding, inspiring, counselling, overseeing and
leading people towards the accomplishment of organizational goals. It is a continuous managerial process
that goes on throughout the life of the organization.
CHARACTERISTICS OF DIRECTING
• Continuing Function
• Pervasive Function
• Creative Function
• Linking function
• Management of Human Factor

SCOPE OF DIRECTING
• Initiates action
• Ensures coordination
• Improves efficiency
• Facilitates change
• Assists stability and growth
ELEMENTS OF DIRECTING
The three elements of directing are
1. Motivation
o Motivation is derived from the word motive, or a need that requires satisfaction.
o Motivation Theories
▪ Maslow’s Need Hierarchy Theory
▪ Theory X and Theory Y
▪ Herzberg’s theory
2.Leadership
:Leadership is the art of motivating a group of people to act toward achieving a common
goal. In a business setting, this can mean directing workers and colleagues with a strategy to
meet the company's needs.
::Leadership styles
▪ Autocratic Style
▪ Democratic Style
▪ Laissez-Faire Style
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 o Leadership theories
▪ Trait Theory
▪ Contingency theory
▪ Situational theory
▪ Behavioural Theory
3. Communication
▪ The word ‘communication’ is derived from Latin word ‘communis’, which
means common. It is a process of exchange of facts, ideas, opinions and a means that
individuals or organizations share the meaning and understanding with one another.
PRINCIPLES OF DIRECTING
o Harmony of objectives:
Individual join the organisation to satisfy the psychological and physiological needs. They are expected to
work for the achievement of the organisation objectives and they will perform their task better if they feel
that if it will satisfy their personal goals
o Maximum individual contribution:
Organisational objectives are achieved at the optimum level when every individual in the organisation
makes maximum contribution towards them
o Unity of command
Furniture get Orders and instructions from one superior only if he is made accountable to bosses
simultaneously there will be confusion conflict disorder and indiscipline of the organisation
o Appropriate techniques
The manager should use correct direction techniques to ensure efficiency of direction the techniques used
should be suitable to the superior the subordinate and the situation
o Direct supervision:
More effective when there is an direct personal contact between a superior and his subordinates. Such
direct contact improve the moral of commitment of employees
o Strategic use of informal organisation:
Management should try to understand and make use of informal groups to strengthen formal and
official relationships this will improve the effectiveness of direction
o Managerial communication:
A good system of communication between the superior and a subordinate help to improve mutual
understanding
o Comprehension:
Communication of Orders and instruction is not sufficient managers should ensure that the coordinates
correctly understand what they are to do and how when they are to do.
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**MANAGERS AS LEADERS:

Concept: A manager can be a leader if they motivate and inspire their team to
achieve goals, provide guidance, and create a welcoming environment. Some say
that the most important role of a manager as a leader is to motivate their team.

Some essential leadership skills for managers include:

communication, emotional intelligence, decision-making, adaptability, empathy, time management,

delegation, conflict resolution, strategic thinking, and teamwork.

Some other skills that can help managers become leaders include: Problem-solving, Resilience,
Trustworthiness, Empowerment of others, and Authenticity.

Some benefits of being a manager as a leader include:

 Higher pay

 More influence on company culture

 Opportunity to make personnel decisions

 Personal growth and development

 Help employees develop and improve

 Create team autonomy

 Create a better work environment

Some challenges that managers face include:

 Decreased performance levels

 Being understaffed

 Lack of communication

 Poor teamwork

 Pressure to perform

 Absence of structure

 Inadequate support

Some qualities of a good manager and leader include:

 Work ethic

 Honest and fair

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 Reliable

 Motivational

 Supportive and trusting

 Focus on progress as well as results

 Ability to cover day-to-day tasks

 Develops staff

Leaders and Managers are not the same:

It is often said that managers are not necessarily leaders, and leaders are not necessarily managers.
Whereas a manager is a job title, a leader is a state of being.

Managers oversee workers to make sure they’re staying on task, following company rules and
guidelines, and generally adhering to what they’re supposed to be doing. Leaders, on the other hand,
have people who look to them for guidance or generally look up to them, although, like managers, they
also may have people who report to them.

What managers can do to become leaders:

Managers can take the following actions to transform themselves into better leaders.

1. Stop micromanaging.

Managing people is good, but micromanaging people is bad. Managers should provide more autonomy to
employees. They should trust their team members and leave room for creative thinking and active
participation in the organization. This autonomy gives employees the freedom to think freely and bring
better ideas to the table.

2. Communicate well.

Leaders are excellent communicators. They ensure that the right message reaches the right person in the
right way. When The Harris Poll conducted the 2023 State of Business Communication survey on behalf
of Grammarly, they found that leaders reported these top three benefits of effective communication:
increased productivity (72 percent), customer satisfaction (63 percent) and employee confidence (60
percent). To become good leaders, managers need to develop the art of communication.

3. Provide timely feedback: Managers should take the time to provide frequent formal and informal
feedback so employees are not surprised when their performance is reviewed at the end of the year.

4. Celebrate diversity: Diversity allows you to pool various resources and skills to achieve
organizational goals. A manager should celebrate diversity to become a good leader.
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5. Make self-reflection a routine.

Managers should take the time to reflect on their own actions and decisions. A leader is always conscious
of their actions and has clarity of thought. Instead of dwelling on the past, they look ahead and think
positively. Managers should be aware of the mistakes they’ve committed so they don’t repeat those
errors.

Traits that make a good leader:

Although effective leaders possess many positive traits, these adjectives describe every good leader:

Adaptable

The most common trait of a good leader is adaptability. Leaders are resilient in difficult situations and see
their teams through these challenges. If a curveball is thrown at them, the leader knows how to adjust to
the situation.

Confident

Confidence is another strong quality of a leader. Pretending to be confident won’t make a leader
effective, however; you must have the capacity to make definitive decisions and remain assertive in tough
situations. The decisions you make as a leader won’t always be well received if they affect employees,
but employees will still have a level of respect for decisions made and delivered with confidence. It
creates a trickle-down effect: Workers will take on challenges and accept changes more confidently if
their leader is confident in their ability to do so.

Inspirational

An inspiring personality is another trait of an effective leader. If you’re not inspiring anyone, who exactly
are you leading? Leaders offer an encouraging word when someone needs it and provide constructive
feedback.

Even-tempered

The ability to handle your emotions well is another characteristic of a good leader. Leaders are not known
for their quick tempers. Instead, they’re valued for remaining calm and composed in high-pressure
situations, retaining the capacity to communicate proactively with others.

**LEADERSHIP THEORIES:

1. Trait Theory of Leadership Rationale

The trait theory of leadership is tied to the "great man" theory of leadership first proposed
49
by Thomas Carlyle in the mid-1800s.1 According to Carlyle, history is shaped by extraordinary
leaders. This ability to lead is something that people are simply born with, Carlyle believed,
and not something that could be developed. Carlyle's ideas inspired early research on
leadership, which almost entirely focused on inheritable traits.

Carlyle's theory of leadership was based on the rationale that:

 Certain traits produce certain patterns of behavior.

 Patterns are consistent across different situations.

 People are "born" with leadership traits.

Even today, books, and articles tout the various characteristics necessary to become a great
leader, suggesting that leadership is somehow predestined in some (or is at least more likely)
while unlikely, if not impossible, in others.

2. CONTINGENCY THEORY OF LEADERSHIP:

Contingency theories of leadership focus on particular variables related to the environment

that might determine which particular style of leadership is best suited for the situation.
According to this theory, no leadership style is best in all situations.

Leadership researchers White and Hodgson suggest that truly effective leadership is not just
about the qualities of the leader, it is about striking the right balance between behaviors,
needs, and context.

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  The contingency theory of leadership supposes that a leader’s effectiveness is
contingent on whether or not their leadership style suits a particular situation.

 According to this theory, an individual can be an effective leader in one circumstance

and an ineffective leader in another one.

 To maximize your likelihood of being a productive leader, this theory posits that you
should be able to examine each situation and decide if your leadership style is going
to be effective or not. In most cases, this requires you to be self-aware, objective and
adaptable.

The contingency theory of leadership is impacted by a range of specific factors in the

average workplace, including:

 Maturity level of the employees

 Relationships between coworkers

 Work pace

 Management style

 Typical work schedule

 Goals and objectives

 Standards for behavior

 Company policies

 Employees’ work styles

 Employees’ morale

MODELS IN CONTINGENCY THEORY:

1. Fiedler model: This includes analysing situational favourableness (on the basis of leader
member relations, tasks structure, and leader position power), leadership styles (in
accordance to team members), and applying the model.

2. Situational leadership model: Contrary to the Fiedler model, the situational leadership
model suggests that the best option for leaders is to adapt their leadership styles to fit their
team members and their individual abilities. This model believes that leaders should first
consider the variables that affect their workplace and then decide the best tactic for how to
51
proceed.

3. Path-Goal model: The Path-Goal model is primarily concerned with identifying processes
(paths) that will allow each team member to meet their individual objectives (goals).
Leaders who implement this model adjust their behaviors and expectations to positively affect
their team’s productivity.

4. Decision-Making model: Also called “the Vroom-Yetton contingency model," this particular
theory believes decision making is a crucial element of leadership and determines the
relationship between the leader and their team members. Building and maintaining this
relationship directly affects the leader’s success.

Applying Contingency Theory in the Workplace

While contingency leadership models diverge on some points, they all share a common thread.
The overlying viewpoint of the contingency theory of leadership is that effective leadership is
contingent on the situation, task and people involved.

Different leaders, each with their own leadership style, will respond differently to a myriad of
factors in the workplace. Among the factors that can affect a leader’s effectiveness are things
like project scope, the size of their team, resources and deadlines. According to contingency
theory, leaders will always find particular situations that challenge them and must be willing
to acknowledge that their success partially depends on their circumstances.

3. BEHAVIORAL THEORIES

Behavioral theories of leadership are based upon the belief that great leaders are made, not
born. Consider it the flip-side of the Great Man theories. Rooted in behaviorism, this leadership
theory focuses on the actions of leaders, not on mental qualities or internal states. According
to this theory, people can learn to become leaders through teaching and observation.

The behavioral theory of leadership is a management theory that focuses on how leaders behave
and how their actions and practices impact others. It suggests that leaders can learn and adopt
behaviors that influence people's actions and performance

Types of behavioural leadership:

1. People-oriented leaders: People-oriented leaders inculcate behaviours that allow them

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to meet the requirements of the people they interact with, such as their clients, supervisors and
employees. Effective interpersonal communication and networking drive these leaders to build
lasting relationships with those around them and inspire their teams to perform.

2. Task-oriented leaders: Task-oriented leaders usually focus on setting up goals and

achieving organisational objectives as their primary focus is on task execution rather than people
management. These leaders often display authoritative behaviour and usually excel in well-
structured and organised environments. Their focus is on the outcome of their projects rather
than the day-to-day developmental tasks

3. Participative leaders: Participative leaders ensure the active participation of all their
team members in the decision-making processes. These leaders focus on functional
communication, collaboration and feedback to enhance the workflow and productivity of their
projects. They identify the strengths and weaknesses of every team member and assign them
tasks accordingly to maximise team efficiency.

4. Indifferent leaders: Indifferent leaders monitor their team's overall performance from a
distance and may not actively contribute to the organisation's workflow. These leaders usually
prioritise personal success and advancement over team interaction or communication. A lack of
cooperation between the leader and team members typically characterises this leadership style.

5. Dictatorial leaders: Dictatorial leaders usually emphasise achieving results than the well-
being of their team members. These leaders may also exert pressure on employees to perform
well, even during challenging or demanding situations. While dictatorial leaders can often ensure
high-quality results for a company, their discouraging behaviour may cause high turnover rates
due to lower employee satisfaction.

6. Sound leaders: Sound leaders follow a sound leadership style, which is the most effective
type of behavioural leadership for success in workplaces. These leaders give equal priority to
boosting company productivity and employee morale, even though it could be challenging to
balance the two. These professionals value their team members while setting achievable goals
and delivering high-quality results

7. Paternalistic leaders: This leadership style reflects the relationship between a parent and
child. Paternalistic leaders focus on acquiring results as they are goal-oriented but flexible

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regarding achieving these goals. These leaders frequently set ambitious goals and reward
employees who achieve these goals. Paternalistic leaders value their team members' strengths
and capabilities and may provide them with opportunities to prosper and excel professionally.

Advantages of a behavioural theory of leadership

Some advantages of studying leadership through the behavioural theory:

 emphasises concern for team members and people of an organisation while promoting

collaboration

 encourages participative decision making to ensure effective processes

 promotes team development by supporting individual and organisational needs

 supports the alignment of individual and group objectives to achieve company goals

 helps managers understand the impact of their behaviour on the leadership style and

productivity of their team

 helps leaders build lasting relationships with team members

 promotes commitment and contribution to achieving organisational objectives

4. MANAGERIAL GRID MODEL OF LEADERSHIP:

The managerial Grid Model of Leadership indicates five basic leadership styles of
practicing managers representing various combinations.

Robert R. Blake and Jane S. Mouton developed the Managerial Grid Model Developed in
the 1960s and it has evolved in the following decades

Advantages of the Managerial Grid Model

 Managers help to analyze their leadership styles through a technique known as grid
training.

 Managers identify how for their concerned about production and people.

Limitations of the Managerial Grid Model

 The model ignores the importance of internal and external limits, matter, and scenarios.

 Some more aspects of leadership can be covered but are not.

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Two Dimensions of Leadership in Managerial Grid Model

The managerial Grid Model is based on two behavioral dimensions; concern for people
and concern for production.

 Concern For People: This is the degree to which a leader considers the needs of team
members, their interests, and areas of personal development when deciding how best to
accomplish a task.

 Concern For Production: This is the degree to which a leader emphasizes concrete
objectives, organizational efficiency, and high productivity when deciding how best to
accomplish a task.

Five Leadership Styles in Managerial Grid

They identified 5 basic leadership styles of practicing managers representing various

combinations of the two dimensions above, as shown in the following figure;

The five resulting leadership styles are as follows:

(1,9) Country Club Style Leadership High People and Low Production

(9,1) Produce or Perish Leadership- High Production and Low People

(1,1) Impoverished Leadership-Low Production and Low People:

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(5,5) Middle-Of-The-Road Leadership-Medium Production and Medium People

(9,9) Team Leadership-High Production and High People

(1,9) Country Club Style Leadership High People and Low Production

(1,9) Country Club Style Leadership style leader is most concerned about the needs and
feelings of his or her team members.

PATH GOAL THEORY OF LEADERSHIP:

The path-goal theory of leadership says that a leader's style, traits and behaviors influence
team productivity, motivation and satisfaction. Path-goal theory assumes that a leader
complements their employees and can compensate for their shortcomings. Effective leaders,
according to this theory, give their employees a clear path to follow to achieve goals,
removing challenges and obstacles. The theory provides guidance for ways leaders can
encourage and support employees in reaching their goals.

The path goal theory of leadership states that a leader’s behavior directly impacts the
satisfaction, motivation, and productivity of subordinates.

According to the research, a leader’s attitude, behavior, and leadership style alongside
environmental factors influence the productivity and satisfaction of a team. They concluded
that leaders need to adjust dynamically depending on the needs of the team. They even
created criteria for what leadership style is most effective for different situations

Key takeaways:

 Path-goal theory is the belief that managers can affect their team's performance by

adapting their leadership style to fit the specific needs of their teams.

 Path-goal theory identifies four primary types of leader behaviors: achievement-oriented

leadership, directive path-goal clarifying leadership, supportive leadership and

participative leadership.

 According to the path-goal theory, employee motivation depends on leadership support

and a manager's ability to compensate for team challenges effectively.

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TYPES:

1. Achievement-oriented: With this type of leadership style, the leader focuses on

encouraging excellence by setting challenging goals. Leaders encourage employees to pursue
their highest level of performance and the leader trusts their ability to handle this.

2. Directive path-goal clarifying: In directive leadership, the leader provides employees

with clear guidelines for the processes and expectations for them, as well as how they
should best carry out tasks. This style of leadership aims to reduce ambiguity in job functions
and clarify work processes.

This can give employees a higher level of certainty regarding procedures, policies and rules.
Leaders define the relationship between performance goals and rewards, including pay
increases and promotions, explicitly to promote clarity and transparency. With this style of
leadership, leaders supervise employees closely, which makes it most appropriate for
inexperienced employees who need guidance and to be checked on regularly.

How to apply this path-goal leadership style at work:

 Meet with your teams regularly to discuss tasks and progress

 Keep lines of communication open, especially with team members who require help with new

tasks

 Send regular shoutouts and words of encouragement to keep team members motivated

3. Supportive: With supportive leadership, the leader pays attention to the needs and well-
being of employees and makes work pleasant for them by being friendly and empathetic.
Leaders who operate under this style treat employees with respect and offer support when
needed. This management style is useful when employees have personal problems or need a
boost in motivation or confidence

4. Participative: This type of leadership behavior involves consulting with employees on

important decisions related to work, task goals and paths to reach goals, enabling the
employee to be directly involved in the decision-making process. This typically results in the
employee exerting greater effort to achieve the goals they selected.Leaders often use this style of
leadership when employees are highly involved or have specialist knowledge. In these situations,
their insight can be invaluable to the leader.

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How to apply this path-goal leadership style at work:

 Create workflow systems that work for every team member (e.g. invest in workflow

management software)

 Keep all work documents and processes accessible to team members so they can give input and

feedback at any time

 Hold alignment meetings where you can brainstorm and build better policies for efficient

workflows

Strategies for using path-goal theory

Here are some strategies you can use the different path-goal leadership styles to inform your own
leadership strategies:

1. Achievement strategies

For this approach to be successful, leaders must display complete confidence in their team's
ability to overcome obstacles. Set high expectations for employee goals. Create a list of
objectives that you want your team members to complete and a time frame in which they're
required to have them completed.

2. Directive strategies

Because this style of leadership is task-oriented, where the leader provides strict guidelines,
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goals and performance standards, the best way to apply this style is through extensive training or
one-on-one coaching.

3. Supportive strategies

With this leadership style, leaders show genuine concern about the needs of their employees and
want to do all they can to help the employees reach their goals. It is most effective in situations
where relationships and tasks are physically or psychologically challenging.

4. Participative strategies

Using this theory, employees can take part in goal setting. Meet regularly with employees to
discuss goals and come up with a strategy together for how you plan to achieve those goals.
Encourage employees to provide feedback regarding progress. This can help you work together
to reach objectives, improve processes and elevate business strategies.

5 major benefits of applying path goal theory of leadership:

1. Builds agile leaders and teams: Having different leadership styles in your tool belt will
guarantee that your teams will thrive even in difficult times. A study on the effectiveness of path
goal theory leadership for schools in the COVID-19 pandemic concluded that even in a global
crisis, having an agile and responsive leader is key to survival.

2. Boosts productivity, motivation, and confidence: All of the leadership styles of path goal theory
account for the motivation of employees. The theory itself was based on the expectancy theory
of motivation or the belief that individuals are inspired to work harder when their efforts are
recognized and rewarded.

3. Helps you create a clear leadership game plan: Even when things turn south, you’ll
have a game plan to rely on with path goal theory. Not every style is suited for every situation
but having a solid management theory to back up your team strategies ensures you won’t be
wasting your time brainstorming. This will save time, resources, and costs in the long run.

4. Encourages a support network: Because path goal theory is focused on the employee-
manager relationship, this encourages a supportive network of collaborators. Employee
satisfaction and motivation are highly considered when building leaders which makes everyone
so much more productive.

5. Builds a positive work environment and culture: The path goal theory as a whole focuses

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on building a positive work culture because team members’ needs are put first. Path goal theory
applied means that communication is always open, collaboration is encouraged, and smooth
workflows are prioritized.

**CONTEMPORARY VIEWS OF LEADERSHIP:

Contemporary leadership theory is the leadership approach for the 21st century. There are
many theories of leadership. Some promote traditional leadership theory approaches, while
others promote contemporary leadership theory approaches, and the numerous concepts
on leadership styles have been subjects of both study and debate for years. Every leader will
approach challenges differently, their personality traits and life experiences greatly
influence his or her leadership style and the organizations they lead. Furthermore, “leadership is
a notion resulting from the interaction between a leader and followers, and not a position or
title within the organization”.

The most contemporary approaches to leadership are as follows:

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1. Transformational Leadership: A transformational leader inspires their employees to
prioritize the goals of the company instead of their personal goals. Such leaders achieve this
through qualities such as charisma which transforms them into icons that inspire confidence

2. Authentic Leadership: The authentic leadership approach embraces this value: its key advice
is "be yourself." Instead of trying to fit into societal expectations about what a leader
should be like, act like, or look like, authentic leaders derive their strength from their own
past experiences. Thus, one key characteristic of authentic leaders is that they are self-aware.
They are introspective, understand where they come from, and have a thorough
understanding of their own values and priorities. Second, they are not afraid to act the way
they are.

3. Servant Leadership: According to this theory, leaders' performance and behavior are
based on the expectation they have concerning the attainment of the goals and the
satisfaction of subordinates. According to this theory, leaders are motivated to work and are
satisfied when their subordinates are satisfied and when they can give paths leading to the
attainment of goals
4. Charismatic Leadership: According to this theory, the main work of a leader is to ensure
the needs of the group are met. Charismatic leadership is an approach to leadership that utilizes
the personal appeal of the leader to inspire followers. EG: Mustafa Kemal Ataturk, the
founder of Turkish Republic and its first president, is known as a charismatic leader. He is
widely admired and respected in Turkey and around the world. His picture appears in all schools,
state buildings, denominations of Turkish lira, and in many people's homes in Turkey."
Charismatic individuals have a "magnetic" personality that is appealing to followers.
When framing requests or addressing others, instead of emphasizing short-term goals,
stress the importance of the long-term vision.

5. Leader-member exchange (LMX): The LMX theory comes from the idea that there's a
relationship between the leader and each member of the team. It suggests that the quality of the
leader-member relationship is a key determinant of a team's success. This relationship depends
on the leader's ability to provide support, resources and opportunities to their team members. In
return, team members are more likely to be loyal and committed to the leader and their vision
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6. Power-and-Influence
As the name suggests, this theory has two key components, including power and influence.
Power is the ability to use authority to get other people to do what you want. Influence is the
ability to persuade and convince others to follow your lead. This theory suggests that leaders
have different types of power and influence that they can use to motivate and inspire their teams

**CROSS CULTURAL LEADERSHIP:

Cross-cultural leadership is a leadership style that involves uniting people from different
cultures and guiding them toward a common goal. It also involves influencing and
motivating people's behaviors and attitudes to achieve a shared organizational goal.

Cross-cultural leadership can have many benefits, including:

 Driving innovation

 Improving decision-making

 Expanding market reach

 Creating inclusive environments

 Fostering employee engagement, satisfaction, and retention

Some challenges of cross-cultural leadership include:

 Understanding cultural norms

 Communication barriers

 Leadership style adaptation

 Building trust across cultures

 Managing conflict resolution

 Decision-making differences

 Overcoming stereotypes and biases

 Developing global leadership competencies

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Theories on Cross-Cultural Leadership:

1. Implicit Leadership Theory (ILT):

This theory asserts that people’s underlying assumptions, stereotypes, beliefs, and schemas
influence the extent to which they view someone as a good leader. Since people across
cultures tend to hold different implicit beliefs, schemas and stereotypes, it would seem only
natural that their underlying beliefs in what makes a good leader differ across cultures.

2. Hofstede’s Cultural Dimensions:

This is one of the most prominent and influential studies to date regarding leadership in a
globalized world. The study reveals similarities as well as differences across cultures and
emphasizes the need to be open-minded to understand the differences in other cultures. As
per this theory, there are five dimensions of culture to compare cultures, to help leaders with an
understanding of how to adjust their leadership styles accordingly; Individualism/Collectivism,
Feminine/Masculine, Power Distance, Uncertainty Avoidance, and Long Term/ Short Term
orientation.

3. GLOBE - The Global Leadership and Organizational Behavior Effectiveness

Research Project: The GLOBE study extended the ILT to include individuals of a common
culture maintaining a relatively stable common belief about leaders, which varies from
culture to culture. They labeled this the Culturally Endorsed Implicit Leadership Theory
(CLT). The GLOBE study expanded Hofstede's dimensions to include Uncertainty Avoidance,
Power Distance, Collectivism I: Societal Collectivism, Collectivism II: In-Group Collectivism,
Gender Egalitarianism, Assertiveness, Future Orientation, Performance Orientation, and
Humane Orientation.

Some qualities of leaders in a cross-cultural environment include:

 Improving their leadership style

 Being open and flexible

 Communicating clearly

 Remaining neutral during conflicts

 Being accommodating of different cultural customs

 Fostering a positive work environment

 Language Skills

 Multicultural Perspective Taking

 Knowledge and cognition

 Cultural Awareness

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 Cross-cultural Schema

 Cognitive Complexity

Following steps can help other organizations tackle the important but difficult task of
integrating different cultures:

 Identify two cultures that need to collaborate In many industries the world is the market,
but it is not flat in the cultural sense and potential gaps between the “home” and “target”
cultures should be identified.
 Identify leaders and leadership talent from each culture Make a thorough judgment
which leaders are sufficiently culturally intelligent to develop for cross-cultural integration
and collaboration.
 Identify appropriate pairs of co-leaders Look for a past track record in multicultural
environments, a willingness to become team-players, high growth potential and an open-
minded, empathetic nature.
 Identify real projects Use real business projects which enhance the learning experience
during an intercultural program.
 Identify a realistic time frame A minimum of three to six months is a reasonable time-
frame for start-up activities, content delivery and evaluation. Often more time is needed.
 Share practices We recommend sharing both “good” and “bad” practices, working
closely together and adopting an enquiring rather than judgmental mindset.
 Adapt for the next cross-cultural challenge Cultural programs should not be replicated
in their entirety because markets and cultures differ.

**LEADERSHIP TRAINING:
Leadership training and development helps identify high-potential individuals that are
likely to become leaders and extends the capabilities and knowledge of individuals who
already perform leadership roles.
Leaders may need training in both soft and hard skills, depending on your organization’s current
challenges. For example, new and coming leaders may need to develop skills such as listening,
conflict resolution and time management, so that they can step in their role.
Why Invest in Leadership Development and Training?
Three powerful forces are redefining the nature of work and create a need for
leadership training:
 Rapid globalization: By 2025, the majority of the Forbes Global 2000 public companies will

be headquartered in emerging markets. This will require leaders to develop new skills to
overcome physical and cultural boundaries and lead teams across borders.
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 Rise of remote workers: Within a decade, half of the US workforce will comprise of

contractors and freelancers. Leaders will need to learn not just how to manage dispersed teams,
but also how to engage and unite them.
 Generation gaps: Gen Y (Millennials) and Gen Z are rising to leadership positions and

bringing in new ideas related to work and learning. This puts pressure on traditional leadership
approaches and requires training to overcome differences.
What Leadership Skills Should Your Organization Develop?
Whether an office manager or a senior executive, great leaders need a foundation of soft skills to
help them positively influence the behavior of co-workers and team members. Below are the
essential leadership skills.
 Listening: This is the ability to redirect your focus from yourself to others and actively work to

understand their needs. Leaders have to be great listeners because this helps them build trust with
their team.
 Loyalty: Good leaders put the success of their team first. As Arnold H Glasow said, “A good

leader takes little more than his share of the blame and little less than his share of the credit.”
 Respect: An essential trait of effective leadership is communicating and acting with respect

and integrity. This helps establish a leadership style based on working together instead of giving
orders.
 Reliability: If team members perceive their manager as a reliable partner who is always on

their side, they will be more motivated.

 Initiative: Leaders have to be proactive—to set direction for the team, to work towards

meeting the company’s goals, to anticipate problems and suggest alternative solutions.
 Passion: A great leader is dedicated to the success of the team, understands what motivates

them and knows how to encourage them to be at their best.

 Enthusiasm: Leaders need to be positive, energetic and encourage others to adopt the same

attitude. This helps get buy in for their ideas and motivate workers to come up with creative
solutions when working through a difficult problem.
 Accomplishment: Being a great leader means being an example to the team, always coming up

with new solutions and testing every possible option before saying that something can’t be
achieved.
 Strategic thinking: Leaders should be able to step back from the daily grind, connect current

tasks with long-term goals and focus on the results, not the process.
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 Support: A great leader should be readily available to answer any questions and resolve any

issues employees might face.

 Honesty: To be successful, leaders have to learn to be authentic and adopt a “what you see is

what you get” attitude—consistency between words and actions.

How to Create an Effective Leadership Training Plan

1. Develop a Culture of Learning:Your leadership development initiative won’t get employee
and executive buy-in if your organization doesn’t value learning and development. That’s why
the success of any corporate training program depends on your culture of learning (or lack
thereof).
2. Define Learning Objectives: First, consider the leadership gaps that your organization may
face—either in recruitment or succession. Do you have difficulty hiring or promoting new
leaders? Are any senior leaders expected to retire soon?
Second, take into account your organization’s strategic objectives. For example, if you’re
planning to expand in a new market, you may want to focus on developing the right leaders to
meet this particular goal.
3. Create the Right Mix of Leadership Training Methods
Certainly, each leadership program requires a tailor-made plan that fits with the organization’s
unique corporate learning needs.
What is common to the best programs, though, is that they use diverse training methods. Here
are the ones used most often:
 One-on-one learning. For example, pairing senior executives with leaders who have just

taken on a new role can be very effective, especially if your goal is knowledge transfer or
succession.
 Group learning. This approach can come in various flavors, involving both internal and

external activities. Group-based learning can be used to

o identify employees with leadership potential

o train future leaders to understand group dynamics

o tackle real-world challenges

o enable leadership team development—those already in management can form a peer group to

help each other develop new skills, improve interpersonal communication and break functional
silos
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  Self-directed learning. It’s true that leaders can’t grow in isolation but self-directed learning

has its place in your training. This form of corporate learning and development can, for
example, be used to teach soft skills such as communication techniques and strategic thinking.

4. Include experiential training: Enabling leaders-in-training to practice what they have learned
creates those “a-ha” moments when they understand how specific skills or knowledge can be used
in a real-world situation.

5. Define success
As with any other type of corporate learning and development, your training needs a definition of
“success”. So, before launching your program, determine how you will measure its impact.

Leadership Training Activities for Employees

Leadership training activities should focus on preparing employees to move from managing
self to managing others. An emerging leader development program can include:

 Self-assessment exercises to build self-awareness and identify areas of improvement

 On-the-job training such as taking charge of a functional project to increase responsibility
and accountability.
 Mentoring and coaching from experienced leaders to help the employee become familiar
with the organizational management and leadership style.
 Group activities to allow emerging leaders to grow together, connect across organizational
functions and develop a management mindset
 Remote training programs will most likely become an emerging trend after the COVID-19
crisis. By creating an online corporate training program you enable employees that are on a
leadership track to learn at their own convenience.

Leadership Substitute Theory

Meaning: Substitutes for leadership theory is based on understanding the context within which
leadership occurs. Different situational factors can enhance, neutralize, or substitute for leader

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behaviors like under certain circumstances, situational factors may substitute for leadership. These
substitutes are of two types - substitutes and neutralizers. The theory was developed by Steven
Kerr and John M. Jermier and published in 1978.
The theory suggests that subordinate, task, and organizational characteristics affect the
relationship between leader behavior and subordinate outcomes.

Substitutes take away from the leader's power and help group members increase their performance.
Neutralizers only remove influence from the leader.

In the leader substitutes model, substitutes are characteristics that take away from a leader's
power. This can lead to increased performance of subordinates.

For example, a team that works well together can be a substitute for leadership. Another way to
reduce the need for leadership is to create self-managed work teams. These teams do not have any
official leader or supervisor.

However, studies indicate that substitutes and neutralizers will not completely replace leaders in
these roles.

Some examples of substitutes for leadership include:

 Closely knit teams of highly trained individuals

 Intrinsic satisfaction
 Professional norms
 Followers' experience, ability, and training
 Feedback from clients, co-workers, and tasks
 Specific organizational policies and procedures

Substitutes for leadership can also bring benefits to an organization by:

 Providing new skills and perspectives

 Revitalizing a team with new skills and approaches to problem-solving

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