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CHAPTER SIX
LEADING/DIRECTING
Leading/Directing is management function which actuates the organization
members to work efficiently and effectively for the attainment of organizational
objectives. Planning, organizing and staffing are merely preparations for doing the
work, and the work actually starts when managers start performing the directing
function. Directing is the interpersonal aspect of management, which deals directly
with influencing, guiding, supervising, and motivating the subordinates for the
accomplishment of the predetermined objectives. Directing is a challenging function
of management, because it deals with the human element of the organization,
which represents a complex of forces about whom not much is known. A person's
beliefs, hopes, ambitions, behavior, satisfaction, and interaction with other persons
are all involved in the directing process.
DEFINITION OF LEADING/DIRECTING
Directing can be defined:
 Leading is the process of influencing people so that they will contribute to
organization and group goals.
 It is influencing people so that they will work willingly and enthusiastically
towards the achievement of organizational goals.
 Leading is the process by which managers seek to influence subordinates to
accomplish goals by communicating with them.
When we say influencing, it does not mean that coercing/forcing, imposing or
pushing people behind. It means rather-motivating people so that they contribute
their maximum effort for the achievement of organizational goal. It is placing
oneself before the group and facilitating progress and inspires followers to
accomplish organizational (group) objectives.
IMPORTANCE OF DIRECTING
Directing enables a manager to convert his/her decision into effective actions. In
fact, there is a high degree of correlation between directing and work performance.
There is a dominant feeling that directing is more of an art than it is a science since
considerable amount of skill is required to understand and work with people.
The importance of the directing function in an organization can be presented as
follows:
 Directing initiatesby giving directives and guidance to employees
 Directing integrates employees’ effort by coordinating actions of the members
and leading toward the objectives
 Directing attempts to get the maximum output of individuals by providing ways
to fully utilize the potentials and capabilities of employees.
 Directing facilitates changes by incorporating environmental and internal
changes into the organization
 Directing provides stability by balancing the different parts of the organization.
Managers should try to integrate both organizational and individual objectives in
order to get the work done by subordinates. Managers must be good leaders to
guide, counsel and influence subordinates so as to win their confidence and
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acceptance. To this end, managers should motivate their subordinates to volunteer

themselves for the accomplishment of organizational objectives.
ELEMENTS OF LEADING
Leading has three major components/elements: leadership, motivation and
communication. Below each of the components will be discussed in detail.
A. LEADERSHIP
Leadership is the art of influencing individual or group activities towards the
achievement of organizational objectives. Leadership is the interpersonal process
by which managers try to influence employees to accomplish set task goals.
Leadership is the process of directing and influencing the task related activities of
group members. As we can see from the above definitions, leadership has three
ingredients: leader, follower and situation – organizational Environment.
Leader is the one with the ability/capacity to understand others’ motivation and to
inspire them with the ability to create a climate for motivation.
Follower (led) is the individuals being led or influenced.
Situation is the working environment in which the leader interacts with the
followers.
FEATURES OF LEADERSHIP
Involves people: employees or followers by their willingness to accept directions
from the leader, group members help define the leader’s status and make the
leadership process possible.
Ability to use the different forms of power:it will use different forms of power
to influence follower’s behaviors in a number of ways.
Constitutes values: It concerns values and requires that followers be given
enough knowledge of alternatives to make intelligent choices when it comes to
respond to a leader’s proposal to lead.
Ability to comprehend motivation forces: leadership has the ability to
comprehend that human beings have different motivation forces at different times
and in different situations
LEADERSHIP VERSUS MANAGEMENT
Management is a broad subject that encompasses activities such as planning,
organizing, staffing, directing, and controlling. Leadership, on the other hand,
focuses almost exclusively on the ‘people’ aspects of getting a job done-inspiring,
motivating, directing, and gaining commitment to organizational activities and
goals. Leadership accompanies and complements the management functions. In
short, management influences brain, while leadership encourages the heart and the
spirit.
THEORIES OF LEADERSHIP
The following are theories of leadership
A. Trait Leadership Theory
Traits are distinctive internal/personal qualities or characteristics of an individual,
such as physical (height, weight, appearance, health, etc), personal (self-
confidence, dominance, adaptable, extroversion/sociability, originality etc) and
mental (intelligence, creativity, knowledge, technical competence etc). A leader

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trait is a physical or personality characteristic that can be used to differentiate

leaders from followers.
Trait theory attempts to find traits that make a leader. It is the old approach, which
focused on identifying the personal traits that differentiated leaders from followers.
Trait theory originated from an ancient theory called “Great Man” theory that
assumes that “leaders are born not made”-a belief dating back to the ancient
Greeks and Romans.The idea in trait theory was to see whether certain traits would
predict the individuals who would emerge (be identified by members of the group)
as leaders.
In searching for measurable leadership traits, researchers took two approaches:
1) They attempted to compare the traits of those who emerged as leaders with the
traits of those who did not.
2) They attempted to compare the traits of effective leaders with those of
ineffective leaders.

Studies that were conducted on the first category have failed to distinguish/uncover
any traits that clearly and consistently distinguish leaders from followers. Leaders
as a group have been found to be somewhat taller, brighter, more extroverted,
persistent and more self-confident than non-leaders. However, millions of people
have these traits, but most of them obviously will never attain a leadership position.
In addition, many established leaders did not and do not have these traits.
(Napoleon, for example, was quite short, and Lincoln was moody and introverted.)
Interestingly enough, studies have also found that people who are too intelligent
compared with other group members do not emerge as leaders-perhaps because
they are too different or too far removed from the group.Studies that were
conducted on the second category have generally failed to isolate traits that are
strongly associated with successful leadership.
Generally, the efforts to identify universal leadership traits ran into difficulties for
the following reasons:
1. Not all leaders possess all the traits and many non-leaders may possess most of
the traits.
2. It gives no guidance as to the magnitude of each trait for a person to be a
leader.
3. No agreement has been reached as to what their relationships are to the actual
instances of leadership.
4. Traits tend to be a chicken-and-egg proposition i.e. Successful leaders may
display traits such as good vocabulary, education and self-confidence after they
have assumed leadership positions.
B. Behavioral Leadership Theories

Behavioral theory assumes that leaders can be made rather than born. Rather than
try to figure out what effective leaders were, researchers tried to determine what
effective leaders did, how they delegated tasks, how they communicated with and
tried to motivate their subordinates, how they carried out their tasks, and so no. This
tries to answer the questions “What do effective leaders do? What ineffective
leaders don't do? How do subordinate react emotionally and behaviorally
(performance) to what the leader does?"
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Two major dimensions of leader behavior emerged from this body of research; one
deals with how leaders get the job done and the other deals with how leaders treat
and interact with their subordinates. The following two studies were conducted:-

1. The University of Michigan Studies

Through interviewing leaders and followers, researchers at the University of
Michigan identified two distinct styles of leadership, referred to as .job-centered
and employee - centered.
The job-centered leader practices close supervision on the subordinates’
performance. This leader relies on coercion, reward, and legitimate power to
influence the behavior and performance of followers.
The employee-centered leader believes in delegating authority and supporting
followers in satisfying their needs by creating a supportive work environment. The
employee centered leader is concerned with followers', their personal
advancement, growth and achievement.
2. The Ohio State Studies
These studies isolated two leadership factors, referred to as initiating structure
and consideration.

Initiating structureinvolves behavior in which the leader organizes and defines

the relationship in the group, tends to establish well-defined patterns and channels
of communication, and spells out ways of getting the job done.

Considerationinvolves behavior indicating sensitiveness to subordinates, respect

their ideas and feelings, and establishes mutual trust and friendship between the
leader and the followers.

In short, the behavioral theory attempted to identify effective leader behaviors that
would work in every situation. But researchers found that leader behaviors that
worked best in one situation were not often as effective in other situations.
C. The Contingency /Situational Leadership Theory
Situational leadership theory grows out of an attempt to explain the inconsistent
findings about traits and styles /behaviors. Situational theory proposes that the
effectiveness of a particular style of leader behavior depends on the situation. As
situations change, different styles become appropriate. This directly changes the
idea of one best style of leadership. In other words, the contingency/situational
theory holds that appropriate leader traits or behaviors are contingent or dependent
on relevant situational characteristics. More specifically, the contingency leadership
theory states that, leadership is the result of the interaction of:
 Leaders behavior and competence
 Followers behavior and competence
 Situations-situational variables such as job characteristics, organizational policies,
leaders member relations (the extent to which a leader has the support of group
members), position power (the amount of power that the organization gives the
leader to accomplish necessary tasks).
D. Theory X and Theory Y Assumptions about People

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A manager’s philosophy about work and the people who perform the work will
influence his/her approach to leadership. Douglas McGregor has hypothesized two
sets of assumptions about people that serve as a philosophical base for leadership
action. These are Theory X and Theory Y Assumptions.

Theory X – pessimistic and negative

A manager basing an operating philosophy on Theory X would impose a directive
leadership style on the individual or work group s/he is supervising. Coercion,
negative motivation, and refusal to allow employee participate in decision-making
would probably be the actions of the manager.
Assumptions held by managers under Theory X are:
1) Employees dislike work and will avoid work if they can
2) As employees dislike work, they must be coerced to achieve objectives.
3) Employees have little ambition; they prefer to be directed and to avoid responsibility.
4) Employees primarily want security.
Theory Y- adopts a developmental approach/ modern + positive set of assumptions
A manager with Theory Y assumption will prepare him/herself to work with people
as individuals, to involve people in the process of decision-making, to openly
encourage people to seek responsibility and to work with people achieve their
goals.
Managers under Theory Y are:
1) Employees do not inherently dislike work; working is as natural as resting and playing.
2) Employees are capable of self-direction and self-control if they are committed to objectives.
3) The typical employee can learn to accept and seek responsibility.
4) Most employees are able to use creativity to solve problems.
LEADERSHIP STYLES
Leadership style implies the way in which the leader exercises leadership; it is the
way in which the functions of leadership are carried out or the way how the leaders
behave towards their subordinates in the accomplishment of the work. These ways
of behaving towards subordinates are influenced by management philosophy
towards work and people. Based on the following points there are four types of
leadership styles: Autocratic, Democratic, Laissez-faire and situational leadership
style.
 How the manager chooses to motivate subordinates
 His/her decision-making style: the degree of decision-making authority
the manager grants to subordinates.
 His/her areas of emphasis (orientation) in the work environment: Task
orientation, employee orientation
1. Authoritarian/Autocratic Leadership Style “I” approach

It is closely associated with the classical approach to management. The manager

who follows this style is dogmatic and leads by the ability to withhold or give

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rewards and punishment, i.e. motivation is through incentives and fear. In this style,
decision-making is solely by the manager, in other words, the leader retains all
authority and responsibility. In the extreme case, the manager makes the decision
and announces it to the work group. There is no opportunity for input into the
decision-making process by the subordinates and communication is primarily
downward. The hallmark of this style is that the manager, who retains all the
authority, executes the entire process. Consequently, the autocratic style is
sometimes called the “I” approach. Variations of this approach find the manager
making the decision and then “telling” it to employees or making the decision and
allowing the group the opportunity to ask questions. The autocratic leader is task-
oriented and places little value on showing consideration to subordinations as a
leadership technique. The Autocratic manager uses Theory X assumption as his
philosophical base for leadership.
Situations where managers are compelled/ forced to use this leadership style:
 When there is a need to influence subordinates in favor of organizational
objectives
 When subordinates are new, they need to be directed.
 When the situation calls for unilateral decision-making
Limitations
 Employees’/subordinates’ ideas will not be used to solve organizational
problems,
 Subordinates would be demotivated, i.e. It may suppress individual initiative
 Poor implementation of decisions
2. Participative/ Democratic/“We” approach
Managers who use the participative style share decision making authority with
subordinates. The degree of sharing can range from the manager’s presenting a
tentative decision that is subject to change to letting the group or subordinate
participate in making the decision. Sometimes called the “we” approach,
participative management style involves others and lets them bring their unique
viewpoints, talents, and experiences to bear on an issue. This style is strongly
emphasized today because of the trends toward downsizing, employee
empowerment and worker teams.

A consultative and democratic approach works best for resolving issues that affect
more than just a manager or decision maker. People affected by decisions support
them more enthusiastically when they participate in the decision making than when
decisions are imposed on them. Also, if others in the management’s unit know more
than the manager does about the issue, common sense urges their inclusion in
decisions concerning it.

Limitations
1) Subordinates may be too involved to influence the manager even when there is
no need.
2) The manager may not be able to influence the subordinates to the extent
needed.

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However, the major advantage of this leadership style is that, it enhances personal
commitment through participation.
3. Laissez faire style/Free rein style/ “They” approach
Often called “they” approach or the spectator style, the free rein style empowers
individuals or groups to function on their own, without the involvement from the
managers to whom they report. The style relies heavily on delegation of authority
and works best when the parties have expert power, when participants have know
how to use the tools and techniques needed for their tasks. Under this style,
managers set limits and remain available for consultation. The managers also hold
participants accountable for their actions by reviewing and evaluating performance.
Free rein leadership works particularly well with managers and experienced
professionals in engineering, design, research, and sales. Such people generally
resist other kind of supervision.In most organizations managers must be able to use
the decision making style that circumstances dictate. As people and circumstances
constantly change, managers should also switch from one style to another
depending on the situation they face at a time.

Laissez faire leaders are characterized by the following behavioral patterns:

 They make few attempts to increase productivity or to meet subordinates’
psychological needs
 They use their power very little, if at all, giving subordinates a high degree of
independence in their operation.
 These leaders maintain hands off policy where each subordinate’s work is
clearly defined.
 Such leaders depend on subordinates to set their own goals and the means of
achieving them, and they see their role as one of aiding the operations of
followers by furnishing them information and acting primarily as a contact
with the groups in the external environment.
4. Situational Leadership style
The situational leadership style states that for a manager to be democrat,
autocratic or laissez-faire, situations force him/her.
B. MOTIVATION
The term motivation derived from the Latin word mover meaning “to move.” In the
present context, motivation represents “those psychological processes that cause
arousal, direction, and persistence of voluntary actions that are goal oriented.
Managers need to understand these psychological processes if they are to
successfully guide employees toward accomplishing organizational objectives.
Motivation is an internal force that energizes behavior, gives direction to behavior,
and underlies the tendency to persist. This definition of motivation recognizes that
in order to achieve goals, individuals must be sufficiently stimulated and energetic,
must have a clear focus or end in mind, and must be willing and able to commit
their energy for a long enough period of time to realize their aim. Since the leading
function of management involves influencing others to work toward organizational
goals, motivation is an important aspect of that function.

Because motivation is an internal force, we cannot measure the motivation of

others directly. Instead, we typically infer whether or not other individuals are
motivated by watching their behavior. As managers analyze their workforces, they
can always see some people who outperform others of equal skill. A closer look
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might reveal instances in which a person with outstanding talents is consistently

outperformed by someone having lesser talents. Why? These latter employees
appear willing to exert more effort, to try harder, to accomplish their goals, often
these hard workers are described by their bosses as “motivated employees.”
Motivated individuals work hard, persist and are goal oriented.
Motivators: Motivators are things, which induce an individual to perform. While
motivation reflects wants, motivators are the identified rewards, or incentives that
sharpen the derive to satisfy these wants. They are also the means by which
conflicting needs may be reconciled or one need heightened so that it will be given
priority over another. A motivator is something that influences an individual’s
behavior. It makes a difference in what a person will do.
The Motivation Cycle
The starting point in this cycle is a need or a deficiency or a state of felt deprivation
an individual experiences at a particular time. This deficiency causes tension
(physiological or psychological in balance), which will be modified by one’s culture
and personality to cause certain wants leading /motivating the individual to some
kind of goal directed behavior. This leads to satisfaction and one cycle of motivation
will be completed.
The Motivation Process
1
Need
deficiency

Need satisfaction Goal Directed behavior

3 2
From this we can understand that deficiency triggers a drive for need satisfaction,
which causes an individual to take a certain course of action that will alleviate a
need and reduce a drive. The need for food for example will result in hunger and
hunger will drive or motivate the individual to take action (eating food), which will
achieve the goal. This goal attainment will restore the physiological or psychological
balance and reduce or cutoff the drive for food.
Motivation Vs Satisfaction
Motivation refers to the drive and effort to satisfy a want or a goal. Satisfaction
refers to the contentment experienced when a want is satisfied. In other words,
motivation implies a drive toward an outcome, and satisfaction is the outcome
already experienced.
Motivation and Performance
All too often, motivation and performance are assumed to be one and the same.
This faulty assumption can lead to poor managerial decisions. The following formula
for performance helps put motivation into proper perspective:
Performance = Ability x Motivation x Environmental conditions
Thus, we see motivation is a necessary but insufficient contributor to job
performance. The multiplication sign is used to emphasize how a weakness in one

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factor can negate the other. The above relationship between performance and
motivation clearly shows us that managers should hire individuals who have the
ability to do what is required. After that, the management challenge is providing
environmental conditions that nurture and support individual motivation to work
toward organizational goals. Keeping other variables constant, motivation and
performance have neither positive nor negative relationship. As motivation
increases, job performance increases, reaches its maximum and the decreases.
THEORIES OF MOTIVATION
There are several theories of motivation. In general, these theories can be grouped
into two as content theories and process theories. Theories that belong to the
former category include: Abraham Maslow’s hierarchy of needs theory, Herzberg’s
two factor theory, Mccelland’s need for achievement theory and Alderfer’s ERG
theory. Theories that belong to the latter category include: V. Vroom’s expectancy
theory, B.F. Skinner’s reinforcement theory, equity theory and goal setting theory.
Below, some of these theories are discussed briefly while the rest theories are to be
covered in advanced courses.
A. Carrot and Stick Approach

This metaphor relates the use of rewards and penalties in order to induce desired
human behavior. It comes from the old story that to make a donkey move one must
put a carrot in front of it and if it does not move beat it with stick from behind.
Despite all the researches and theories of motivation that have come to the fore in
recent years, reward and punishment are still recognized/considered by strong
motivators. For centuries, however, they were too often thought of as the only
forces that could motivate people. Carrot - money in the form of pay or bonuses.
Stick – fear such as fear of loss of job, loss of income, reduction of bonuses
demotion or some other penalty.
Failures of carrot and stick approach
1. Carrot can be obtained by any member of the organization without
differentiation in performance – through such practices as salary increases and
promotion by seniority, automatic “merit” increases, and executive bonuses not
based on individual manager performance. It is as simple as this: If a person put a
donkey in a pen full of carrots and then stood outside with a carrot, would the
donkey be encouraged to come out of the pen?
2. Stick in the form of fear is not the best kind of motivating factor. It often gives
rise to defensive or refectory behavior, such as union organization, poor quality
work, executive indifference, failure of a manager to take any risk in decision-
making, or even dishonesty.
B. Maslow's Need Hierarchy Theory
This is one of the most widely known theories of motivation. The critical part of this
theory is that needs are arranged in hierarchy. Since one need does not disappear
when another emerges, all needs tend to be partially satisfied in each area.
According to Maslow, human needs can be categorized into five as: physiological
needs, safety needs, social needs, esteem needs and self actualization needs.

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 Physiological Needs: The physiological needs are at the bottom of the hierarchy
because they tend to bear the highest strength until they are reasonably satisfied.
Unless these needs are satisfied to the degree necessary for the efficient operation
of the body, the majority of a person’s activities will probably be at this level. The
other levels will provide him with little motivation. These needs include the need for
food, shelter, cloth, water, rest, air, sex, etc. They are survival needs without which
human being’s survival will be in danger.
 Safety Needs: until the physiological needs of the human race are addressed to a
reasonable degree, safety needs will not be fully addressed. The degree of
reasonableness is subjective. In this hierarchy comes the need for safety- a need for
being free of physical danger also referred to as self-preservation. These needs
show the need to live in an environment where there is no harm.
 Social Needs: After the first two needs are satisfied, social needs become
important in the need hierarchy. This category includes the need for friendship,
affection, acceptance, and interaction with others. Since man is a social being, he
has a need to belong and to be accepted by various groups. When social needs
become dominant, a person will strive for meaningful relations with others. If the
opportunity for association with other people is reduced, individuals often take
vigorous action against the obstacles to social interaction. In the organization,
individuals form informal group environments.
 Esteem Needs: Esteem needs are concerned with self-respect, self-confidence, a
feeling of personal worth, feelings of being unique and a need to be recognized by
one and all. Satisfaction of these needs produces feelings of self-confidence,
prestige, power and control. The satisfaction of esteem needs is not always
obtained through mature or adaptive behavior. It is sometimes generated by
disruptive and irresponsible actions. Some of the social problems have their roots in
the frustration of esteem needs
 Self Actualization Needs: includes self fulfillment and realization of one’s
potential. Self actualization is the need to maximize one’s potential, whatever it
may be. This is related to the development of intrinsic capabilities which lead
individuals to seek situations which can utilize their potential. This includes
competence which implies control over environmental factors, both physical and
social, and achievement. An individual with high levels of achievement needs will be
restless unless he can find fulfillment in doing what he is trained to do best. As
Maslow puts it, "this need might be phrased as the desire to become more and
more what one is, to become everything that one is capable of becoming."

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Figure 6.1 Maslow's Need Hierarchy

The major assumptions upon which the need hierarchy theory is based
are:

 A satisfied need ceases to motivate; i.e. it is no longer a motivator.

 Unsatisfied need can cause frustration, conflict, and stress. It is the unsatisfied
need that motivates an individual.
 A person should minimally satisfy a lower level need before starting thinking
about the satisfaction of the next higher level need.
 The needs are arranged in the order of importance; i.e. as one goes up the
hierarchy, the importance one attaches to the corresponding needs falls.
 A person redirects his effort to the already satisfied and passed level need upon
the disturbance of that need. Sudden unemployment or loss of loved one could
lead a person to shift his/her concern.
The main drawbacks of this theory include:
 There is no evidence that human needs are found arranged in such a
hierarchy.
 There is also little evidence to support the idea that people must meet their
needs in sequence up the hierarchy as outlined by Maslow.
However, the significance of this theory to management is to apply different
motivators to different employees found in the hierarchy.

C. Two Factor Theory(motivation-hygiene theory)

This theory is developed by psychologist Frederick Herzberg.This theory was termed the
two-factor theory and proposed that motivators rather than hygiene factors motivate employees.
From his research, Herzberg concluded that job dissatisfaction and job satisfaction arise from
two separate sets of factors.
Dissatisfiers/ Hygiene Factors: are features of the work environment rather than the work
itself. They include such things/factors as salary, status, and fringe benefits, working conditions,
quality of supervision, interpersonal relations, and company policy. The most important of these
factors is company policy, which many individuals judge to be a major cause of inefficiency and
ineffectiveness. The word „hygiene‟ indicates that they stop dissatisfaction from occurring, and
work could be very dissatisfying if they are absent. Positive ratings for these factors did not lead
to job satisfaction but merely to the absence of job dissatisfaction. All the hygiene factors do is
ensure that a state of no dissatisfaction exists.
Motivators/ Satisfiers: include achievement, recognition, responsibility, and nature of the job
itself, and advancement- all related to the job context and the rewards of work performanceseem
to be related to job-satisfaction.
D. ERG Theory
ERG theory is a well-known simplification of the hierarchy of needs theory. ERG theory
proposes that employees are motivated by three needs: Existence, Relatedness, and Growth.
Existence needs:are concerned with sustaining human existence and survival, and cover
physiological and safety needs of a material nature.
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Relatedness needs:are concerned with relationships to the social environment, and cover love or
belonging, affiliation, and meaningful interpersonal relationships of a safety or esteem nature.
Growth needs:are concerned with the development of potential, and cover self esteem and self
actualization.
C) COMMUNICATION
Communication is the process through which people and organizations accomplish
objectives. By communicating with others we share attitudes, values, emotions,
ambitions, wants, and needs. Behind every success, there is effective
communication that is well planned and thoughtfully executed. Successful
managers effectively communicate their vision for a work unit or the company as a
whole. The following points show the importance of communication in organizations.
“Communicate everything you possibly can to your partners. The more they know,
the more they will understand. The more they understand, the more they will care.
Once they care, there is no stopping them. If you don’t trust your associates to
know what is going on, they will know you don’t really consider them partners.
Information is power and the gain you get from empowering your associates more
than offsets the risk of informing your competitors".

“Listen to everyone in your company and figure out ways to get them talking. The
folks on the front lines-the ones who actually talk to the customer- are the only ones
who really know what is going out there. You would better find out what they know.
This really is what total quality is all about. To push responsibility down in your
organization, and to force good ideas to bubble up within it, you must listen to what
your associates are trying to tell you”.
Communication Process
Communication is a two way interaction between two parties to transmit
information and mutual understanding between themselves.Communication is the
transmission of information-data in a coherent, usable form-from one person to one
person or group to another. Rational communication strives to achieve a common
understanding-agreement about the meaning and intent of the message-among all
parties to each communication. Although much of the managerial information that
managers rely on is in numeric form, the greatest portion of managerial activity
depends on verbal communication and competent use of language. Able
communicators respect the conventions of language-grammar, spelling and
punctuations. They know precisely what they wish to say and thoughtfully select the
best way to say it. In addition, the communicator needs to be certain that the
person who receives the information actually understands the
message.Communication is a process- a set of steps usually taken in a definite
sequence. As a process, communication is consists of the major elements described
below.
1. Sender: is the initiator or source of the information.
2. Receiver: is the person or group that gets the information
3. Encoding: it takes place when the sender translates the information to be
transmitted into a series of symbols. It is the mechanism through which one’s
mental thoughts into understandable symbols.

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4. Decoding: is the process by which the receiver interprets the message and
translate it into meaningful information.
5. Medium/Channel: isthe means chosen by the sender to transmit the message
6. Message: isthe information that the sender wants to transmit.
7. Feedback: is the mechanism that enables the sender and the receiver to assure if
the intended communication has taken place and mutual understanding has been
achieved.
8. Noise: is any factor that disturbs, confuses or interferes with communication. Noise
can arise along what is called the communication channel or method of
communication.
The communication process is depicted in the following diagram.

Message

Sender/ Encoding Channel Decoding Receiver

source

Noise

Feedback

Types of Communication

Communication can be classified into two broad categories as formal and informal
communication.

a) Formal Communication: it is the official patterns of communication that are

designed, approved, and recognized by the management of the organization. It is
an integral part of the organization structure. Organizational chart can be regarded
as anatomical drawing of the official channels (paths) through which official
messages travel. Formal communication is thus the official chains that determine
the flow and direction of official messages among individuals or divisions in an
organization. Formal channels of communication provide for the structured flow of
primarily vertical communication (upward and downward) and secondarily crosswise
(horizontal and diagonal) communication.
Vertical communication: consists of Downward andUpwardCommunication
Downward Communication: Messages flowing upper from organizational levels to
lower organizational levels constitute downward communication.it takes place daily,
in on-the-job conversation and interactions between managers and team leaders
and their subordinates. It conveys such information as CEO’s vision, company
mission, changes in rules and regulations, delegation of authority, job designs,
performance appraisal results, orders, etc.
Upward communication: Upward communication constitutes the flow of
information from subordinates to upper management. this provides the feedback
required by downward communication. It allows workers to request assistance in
solving some problems, and it provides a means for workers to recommend
13 | P a g e Introduction to Management- Lecture Note BY: Fasika Fanta
 Infolink Univerfsity college Department of Business Management

solutions to others. Workers also use upward communication to provide status

reports and inform higher authorities about employee complaints. It conveys such
information as complaints, feedback, recommended solutions, research results, etc.
Horizontal communication: connects people of similar rank and status within an
organization and outside stakeholders with those insiders who can best meet their
needs. Through horizontal channels, workers and managers provide feedback, keep
teammates informed, coordinate activities, seek assistance, and stay in contact
with customers.
Diagonal Communication: Diagonal communication takes place between work
units or people at different levels of organizational hierarchy but without having
direct reporting relationship. It is designed to support the vertical and horizontal
communication systems.
b) Informal Communication: informal communication networks carry casual, social
and personal messages on a regular basis in or around the workplace. These
channels are often called, collectively, the grapevine. Informal communication
channels disseminate rumors, gossip, accurate as well as inaccurate information
and occasionally official messages. Anyone inside or outside an organization can
originate a grapevine message. Grapevine messages are transmitted in many ways
face to face, by telephone, e-mail, etc.

Messages transmitted through informal channels usually result from incomplete

information from official sources, environmental influences in the organization or
outside it, and the basic human needs to socialize and stay informed. When
changes occur, people like to speculate about what they will mean. When people
feel insecure or fearful because of cutbacks and layoffs, rumors fly about what will
happen next. Grapevine has the following characteristics:
 It can penetrate the tightest security
 It spreads in a higher speed like wildfire
 It tends to carry messages from anonymous sources
 Its messages are difficult to stop or counter once they get started
 It is accessible to every person in an organization
 It can be supportive or destructive to management efforts

14 | P a g e Introduction to Management- Lecture Note BY: Fasika Fanta