Principles of Management

BBA-103

UNIT-5 LEADING
 Motivation
Motivation is the set of psychological forces that energize (arouse enthusiasm) and makes
people persist in their efforts to accomplish a goal.

Energize effort--- is concerned with the choices that people make about how much effort to put forth in their
jobs.
(“Do I really knock myself out or just do a decent job?”)
Persistence of effort--- is concerned with the choices that people make about how long they will put forth effort
in their jobs before reducing or eliminating those efforts.
(“I am only halfway through the project, and I’m exhausted. Do I plow through to the end, or just call it quits?” )
Theories of Motivation

--- Maslow’s Hierarchy of Needs Theory

--- McGregor’s Theory X and Theory Y
--- Herzberg’s Motivation- Hygiene Theory
--- Locke’s Goal Setting Theory
--- Vroom’s Expectancy Theory
Maslow’s Hierarchy of Needs Theory: Five
Levels
In 1943, one of the first researchers to study motivation was a psychology
professor Abraham Maslow, He put forth his hierarchy of needs theory, which
proposes that people are motivated by five levels of needs:

(1) Physiological
(2) Safety/Security
(3) Love/Belongingness/Social
(4) Esteem, and
(5) Self-actualization

A need is a deficit within an individual, such as a craving for water or affection

 Types of Needs
A physiological need--- relates to the normal functioning of the body. Physiological needs include the
needs for water, food, rest, and air etc.
A security or safety need--- relates to the individual’s desire to be free from harm, including both
bodily and economic disaster.
A social/Love/Belongingness need--- includes the desire for love, companionship, and friendship.
An esteem need--- is concerned with the desire for respect.
A self-actualization need--- refers to the desire to maximize whatever potential an individual
possesses.
For example, in a high school, a principal who seeks to satisfy self-actualization needs would strive to
become the best principal possible
Maslow’s Hierarchy of Needs Theory
--- Maslow argued that each level in the needs hierarchy must be substantially
satisfied before the next need becomes dominant.
--- An individual moves up the needs hierarchy from one level to the next.
--- Maslow separated the five needs into higher and lower levels.
Lower-order needs--- physiological and safety needs
Higher-order needs--- social, esteem, and self-actualization
Managerial Implication
Managers using Maslow’s hierarchy to motivate employees do
things to satisfy employees’ needs. But the theory also says that
once a need is substantially satisfied, an individual is no longer
motivated to satisfy that need. Therefore, to motivate someone,
you need to understand what need level that person is on in the
hierarchy and focus on satisfying needs at or above that level.
 McGregor’s ‘Theory X’ and ‘Theory Y’
Douglas McGregor is best known for proposing two assumptions about
human nature: Theory X and Theory Y.
Theory X--- is a negative view of people that assumes workers have little ambition, dislike work, want to
avoid responsibility and need to be closely controlled to work. People must therefore be coerced to get
them to put in adequate effort.

Theory Y--- is a positive view that assumes employees enjoy work, seek out and accept responsibility, and
exercise self direction.
McGregor believed that Theory Y assumptions should guide management practice and proposed that
participation in decision making, responsible and challenging jobs, and good group relations would
maximize employee motivation.
 McGregor’s Theory X and Theory Y
--- McGregor implies that managers who use ‘Theory X’ assumptions are “bad” and
that those who use ‘Theory Y’ assumptions are “good”.

--- The basic rationale for using ‘Theory Y’ rather than ‘Theory X’ in most situations is
that managerial activities that reflect ‘Theory Y’ assumptions generally are more
successful in motivating employees than are managerial activities that reflect
‘Theory X’.

--- ‘Reddin’ proposes a ‘Theory Z’ —a dimension that implies managers who use
either ‘Theory X’ or ‘Theory Y’ assumptions when dealing with people can be
successful, depending on their situation.
 Herzberg’s Motivation- Hygiene Theory (Two-
Factor Theory)
--- During the 1950s, Frederick Herzberg developed another popular theory of motivation called the two-
factor theory.
--- Herzberg wanted to know when people felt exceptionally good (satisfied) or bad (dissatisfied) about their
jobs. Herzberg interviewed 203 accountants and engineers about times when they were highly satisfied and
other times when they were highly dissatisfied at work.

--- His findings suggested that the work characteristics associated with dissatisfaction were different from
those pertaining to satisfaction, which prompted the notion that two factors influence satisfaction.
--- He named two factors as:
---Hygiene factors
--- Motivators
 Hygiene Factors
---Hygiene factors (maintenance factors/extrinsic factors)--- involves the presence or absence of job dis-
satisfiers, such as working conditions, pay, company policies, and interpersonal relationships.

---When hygiene factors are poor, work is dis-satisfying. However, good hygiene factors remove the
dissatisfaction; they do not cause people to become highly satisfied and motivated in their work. Hygiene
factors work only in the area of dissatisfaction. The opposite of job dis-satisfaction is not job satisfaction,
but no dis-satisfaction.

Ex.- Unsafe working conditions or a noisy work environment will cause people to be dissatisfied, but their
correction will not lead to a high level of motivation and satisfaction.
 Motivators
--- The second set of factors called Motivators (Intrinsic factors) influences job satisfaction and focus on
higher-level needs and include achievement, recognition, responsibility, and opportunity for growth.

--- Motivators work only in the area of satisfaction. The opposite of job satisfaction is not job
dissatisfaction, but rather no job satisfaction

--- Herzberg believed that when motivators are absent, workers are neutral toward work; when
motivators are present, workers are highly satisfied and motivated.

--- To motivate people, Herzberg suggested emphasizing motivators. Motivators such as challenge,
responsibility, and recognition must be in place before employees will be highly motivated to excel at
their work.
Herzberg’s View
 Locke’s Goal Setting Theory
Goal-setting theory, described by Edwin Locke and Gary Latham, proposes that specific, challenging
goals increase motivation when the goals are accepted by subordinates and these subordinates
receive feedback to indicate their progress toward goal achievement.

There are four key components of goal-setting theory:

--- Goal Specificity
--- Goal Difficulty
--- Goal Acceptance
--- Feedback
Components of Goal-setting Theory
1. Goal specificity--- refers to the degree to which goals are concrete and clear. Specific goals such as
“Visit one new customer each day,” or “Sell Rs.100000 worth of merchandise a week” are more
motivating than vague goals such as “Keep in touch with new customers” or “Increase merchandise
sales.”
2. Goal difficulty--- hard goals are more motivating than easy ones. Easy goals provide little challenge
for employees. Highly ambitious but achievable goals ask people to stretch their abilities.
3. Goal acceptance--- means that employees have to “buy into” the goals and be committed to
them. Managers often find that having people participate in setting goals is a good way to increase
acceptance and commitment.
4. Feedback--- means that people get information about how well they are doing in progressing
toward goal achievement. Managers must provide performance feedback on a regular, ongoing
basis.
Vroom’s Expectancy Theory
Psychologist Victor Vroom formulated a motivation theory applicable to work
settings that is based on people’s expectations.

Expectancy theory--- The theory that people will be motivated

to the extent to which they believe that their efforts will lead
to good performance (Expectancy), that good performance will
be rewarded (Instrumentality), and that they will be offered
attractive rewards (Valence).
 (E → P) Expectancy
(E → P) Expectancy--- involves determining whether putting effort into a
task will lead to high performance.

--- For this expectancy to be high, the individual must have the ability, previous experience, and necessary
equipment, tools, and opportunity to perform.

Ex. If Mr. X, a salesperson at a Gift Shop, believes that increased selling effort will lead to higher personal
sales, we can say that he has a high (E → P) expectancy. However, if he believes that he has neither the
ability nor the opportunity to achieve high performance, the expectancy will be low, and so will be his
motivation.
(P → O) Instrumentality
(P → O) Instrumentality--- involves determining whether successful performance will
lead to the desired outcome or reward.

--- If the P → O instrumentality is high, the individual will be more highly motivated. If the instrumentality
is that high performance will not produce the desired outcome, motivation will be lower.

Ex.- If Mr. X believes that higher personal sales will lead to a pay increase, we can say that he has a high P
→ O instrumentality. If not, he will be less motivated to work hard.
Valence (V)
(V) Valence is the value of outcomes, or attraction to outcomes, for the individual.

--- If the outcomes that are available from great effort and good performance are not valued by
employees, motivation will be low. Likewise, if outcomes have a high value, motivation will be higher.

Ex.- If Mr. X places a high value on the pay raise, valence is high, and he will have a high motivational
force. On the other hand, if the money has low valence for Mr. X, the overall motivational force will be
low.
Expectancy theory holds that for people to be highly motivated, all three variables, expectancy,
instrumentality and valence—must be high.
 Managerial Implications
(E → P) Expectancy--- Employees should be given the appropriate training and encouragement.
An investment in training will strengthen their hunches that effort will lead to good
performance.

(P → O) Instrumentality--- Employees should be presented with credible evidence that good

performance does lead to anticipated rewards. A manager should reassure employees that good
work will be both noticed and rewarded.

(V) Valence--- Individual differences among employees must be taken into account. Different
people attach different valences to different rewards, so a manager should try to match rewards
with individual preferences.
Exam Question

What is Motivation? Explain any two/three of them in detail. (***)

 What Is Communication?
Communication can be defined as the process by which information is
exchanged and understood by two or more people

Exchanged: If information or ideas have not been conveyed, communication hasn’t taken
place. The speaker who isn’t heard or the writer whose materials aren’t read hasn’t
communicated.

Understanding: For communication to be successful, the information must be understood. A

letter written in Spanish addressed to a person who doesn’t read Spanish can’t be considered
communication until it’s translated into a language the person does read and understand.
Communication and Manager’s Job
EXTERNAL INTERNAL
INFORMATION INFORMATION

MANAGER AS MONITOR
INFORMATION PROCESSOR
COMMUNICATOR

MANAGER AS MANAGER AS
DISSEMINATOR SPOKESPERSON
 Functions of Communication
Information: Individuals and groups need information to get things done in organizations. Communication
provides that information.

Release for emotional expression of feelings: For employees, their work group is a primary source of social
interaction. The communication that takes place within the group is a fundamental mechanism by which
members share frustrations and feelings of satisfaction. (Fulfillment of social needs)

Control: Communication acts to control employee behavior in several ways. As we know organizations have
formal guidelines that employees are expected to follow. For instance, when employees are to be communicated
about job related grievance to follow their job description, or to comply with company policies, communication is
being used to control.

Motivation: Communication acts to motivate by clarifying to employees what specific goals they have to achieve
and providing them feedback on progress toward goals.
The Basic Model of Communication
(Communication Process)
 The Basic Model of Communication
(Communication Process)
Sender-- The sender is anyone who wishes to convey an idea or concept to others.
Encoding-- The sender originates the message by encoding it, that is, by constructing the message. The sender
encodes the idea by selecting symbols (Words) with which to compose a message.
Medium-- The method or means of transmission. Examples of a medium are spoken words, written memos,
faxes, and e-mails. The receiver acquires, or receives, the message by hearing it, reading it, or having it appear on
a fax or computer.
Receiver– The receiver is the person to whom the message is sent.
Decoding-- The receiver then begins decoding the message that is, interpreting it. The receiver decodes the
symbols to interpret the meaning of the message.
Feedback-- Feedback occurs when the receiver responds to the sender’s communication with a return message.
Noise
The entire communication process is susceptible to noise—
disturbances that interfere with the transmission, receipt, or
feedback of a message. Typical examples of noise include illegible
print, phone static, inattention by the receiver, or background
sounds of machinery or coworkers. However, anything that
interferes with understanding can be noise.
Barriers to Communication
Some Barriers That Happen within the Communication Process
Sender barrier—no message gets sent. Example: If a manager has an idea but is afraid to voice it because he
or she fears criticism, then obviously no message gets sent.

Encoding barrier—the message is not expressed correctly. Example: If your vocabulary is lacking or English is
not your first language, you may have difficulty expressing to a supervisor, coworker, or subordinate what it
is you mean to say.

Medium barrier—the communication channel is blocked. Example: When someone’s phone always has a
busy signal or a computer network is down, these are instances of the communication medium being
blocked.
 Barriers to Communication…… contd.
Decoding barrier—the recipient doesn’t understand the message. Example: You don’t know English.

Receiver barrier—no message gets received. Example: Because you were texting during a class
lecture, you weren’t listening when the professor announced a new assignment due to tomorrow.

Feedback barrier—the recipient doesn’t respond enough. Example: You give some people street
directions, but since they only nod their heads and don’t repeat the directions back to you, you
don’t really know whether you were understood
 Other Barriers to Communication….
Defensiveness: When people feel they’re being threatened or their ego is challenged they
tend to react in ways that hinder effective communication and reduce their ability to
achieve mutual understanding. People become defensive through the process of denial--
the suppression of information one finds uncomfortable.

Ex.- Top management might decide, for to require employees to enroll in a physical fitness
program so the company might be able to reduce healthcare costs. Many physically unfit
employees might dismiss the requirement as simply a joke.
Other Barriers to Communication….
Insufficient Nonverbal Communication: Effective communicators rely on both verbal and
nonverbal communication. If verbal communication is not supplemented by nonverbal
communication, messages may not be convincing.

Ex.- If the manager expresses approval for an idea with a blank facial expression, the
approval message might not get through. As one worker said, “My manager is a zombie,
so I never know what she is really thinking.”

Nonverbal communication consists of messages sent outside of the written or spoken

word, primarily expressed through (1) eye contact, (2) facial expressions, (3) body
movements and gestures, and (4) touch.
 Other Barriers to Communication….
Information Overload- which is when information exceeds our processing capacity.
What happens when individuals have more information than they can process? They
tend to ignore, pass over, forget, or selectively choose information or they may stop
communicating. The result is lost information and ineffective communication.

Ex.- A marketing manager goes on a week-long sales trip to Spain where he doesn’t have
access to his e-mail, and he faces 1,000 messages on his return. It’s not possible to fully
read and respond to each message without facing information overload
 Other Barriers to Communication….
Difficulty Level of Language: The difficulty level of language affects receiver
comprehension. Communicators are typically urged to speak and write at a low
difficulty level. At times, however, a low difficulty level is inappropriate.

Ex.- A manager communicating with technically sophisticated employees, using a low

difficulty level can create barriers. The employees may perceive the manager as
patronizing and may tune him or her out.

Ex.- The use of jargon, or insider language, is closely related to difficulty level. When
dealing with outsiders, jargon may be inappropriate; with insiders (people who share a
common technical language), it may be appropriate.
 Other Barriers to Communication….Jargon
Jargon--- which is vocabulary particular to a profession or group,
interferes with communication in the workplace.
Any idea what “rightsizing,” “delayering,” “unsiloing,” mean?

--- “Rightsizing” means laying off workers.

--- “Delayering” means firing managers, or getting rid of layers of management.
--- “Unsiloing” means getting workers in different parts of the company to work
with others outside their own areas.
 Formal Versus Informal Communication
Formal communication-- refers to communication that takes place within prescribed
organizational work arrangements. For example, when a manager asks an employee to
complete a task, that’s formal communication.

Informal communication-- is organizational communication not defined by the

organization’s structural hierarchy. When employees talk with each other in the lunch
room, as they pass in hallways etc. they engage in informal communication.
Formal Communication
Formal communication is of three types

(1) Vertical—meaning upward and Downward– Vertical communication is the flow of messages up and
down the hierarchy within the organization: bosses communicating with subordinates, subordinates
communicating with bosses.
(2) Horizontal—meaning laterally (sideways)-- consulting with colleagues at the same level as you
within the organization.
(3) External—meaning outside the organization.-- External communication with other stakeholders—
customers, suppliers, shareholders etc.
Exam Questions
What is Communication? Explain process of communication. What are barriers to effective
communication? (***)
Leading

Leading is the process by which a person exerts influence

over other people and motivates, and directs their
activities to help achieve organizational goals.
Leadership Styles

“A leadership style is the behavior a leader exhibits

while guiding organization members in appropriate
directions.”
Studies Related to Leadership Styles
Several studies have been conducted to identify leadership behavior.

--- University of Iowa studies

--- Ohio State University (referred to as the OSU studies)
--- University of Michigan (referred to as the Michigan studies)
--- The Managerial Grid/ The Leadership Grid (Developed by Robert R. Blake and Jane S. Mouton)
 UNIVERSITY OF IOWA STUDIES
The University of Iowa studies explored three leadership styles to find which was the
most effective
Autocratic Style--- (“I” approach) The autocratic style described a leader who dictated work methods,
made unilateral decisions, and limited employee participation. (does not share decision-making authority
with subordinates)
Democratic Style/ Participative Style (“We” approach)--- The democratic style described a leader who
involved employees in decision making, delegated authority, and used feedback as an opportunity for
coaching employees. (share decision making authority with subordinates)
Laissez-faire style/Free-Rein Style/ Spectator style/ (“They” approach)--- The laissez-faire style leader let
the group make decisions and complete the work in whatever way it saw fit. (empowers individuals or
groups to function on their own, without direct involvement from the managers to whom they report.)
Democratic style of leadership was most effective
OSU STUDIES (task versus people)
Ohio State researchers identified two major behaviors they called consideration and
initiating structure.
Consideration--- is the extent to which a leader is friendly, approachable, and supportive
and shows concern for employees.
Initiating structure--- is the degree to which a leader structures the roles of employees by
setting goals, giving directions and setting deadlines. A leader’s ability to initiate
structure primarily affects subordinates’ job performance.
--- By making a matrix out of these two independent dimensions of leader behavior, the Ohio State
researchers identified four styles of leadership.
--- High–high leader (high in consideration and high in initiating structure) achieved high subordinate
performance.
Initiating Structure
Typical behaviors included

-- allocating subordinates specific tasks;

-- establishing standards of job performance;
-- scheduling work to be done by subordinates;
-- encouraging the use of uniform procedures.
Consideration
Typical behaviors included

-- expressing appreciation for a job well done;

-- not expecting more from subordinates than they can reasonably do;
-- helping subordinates with personal problems;
-- being approachable and available for help;
-- rewarding high performance
 The Michigan Studies
--- About the same time the OSU leadership studies were being carried out, researchers at the University of
Michigan, led by Rensis Likert were also conducting a series of leadership studies.
--- the Michigan studies pinpointed two basic types of leader behavior: job-centered behavior and employee-
centered behavior.
Job-centered behavior--- is leader behavior that focuses primarily on the work a subordinate is
doing. The job-centered leader is interested in the job the subordinate is doing and in how well the
subordinate is performing that job.
The employee-centered-- leader is attentive to the personal needs of subordinates and is interested
in building cooperative work teams that are satisfying to subordinates and advantageous for the
organization.
--- Employee-oriented leaders were associated with high group productivity and higher job satisfaction
 OSU/Michigan Studies

The results of the OSU studies and the Michigan studies were
similar. Both research efforts indicated two primary dimensions
of leader behavior: a work dimension (structure behavior/ job-
centered behavior) and a people dimension (consideration
behavior/employee-centered behavior).
 The Leadership/ Managerial Grid
--- Blake and Mouton used two leadership behaviors, concern for people (that is,
consideration) and concern for production (that is, initiating structure), to categorize
five different leadership styles.
--- The Leadership Grid has “concern for production” on the horizontal axis and
“concern for people” on the vertical axis.
--- Both behaviors are rated on a nine-point scale, with 1-- representing “low” and 9--
representing “high.”
--- Blake and Mouton suggest that a “high-high,” or 9,9, leadership style is the best.
Concern for production-- involves a desire to achieve greater output, cost-effectiveness, and
profits in profit-seeking organizations.

Concern for people-- involves promoting friendship, helping coworkers get the job done,
and attending to things that matter to people, such as pay and working conditions.

-- 9,1 style (Produce or Perish Style/ Authority Compliance Style): primary concern for
production; people secondary
-- 1,9 style (Country Club Style): primary concern for people; production secondary
-- 1,1 style (Impoverished Style): minimal concern for either production or people
-- 5,5 style (Middle of the Road Style): moderate concern for both production and people to
maintain the status quo
-- 9,9 style (Team Style): high concern for both production and people as evidenced by
personal commitment, mutual trust, and teamwork
 Qualities of a Good Leader
Qualities associated with a good leader
1. Drive--- Leaders exhibit a high effort level. They have a relatively high desire for achievement, they are ambitious, they
have a lot of energy, they are tirelessly persistent in their activities, and they show initiative.
2. Desire to lead--- Leaders have a strong desire to influence and lead others. They demonstrate the willingness to take
responsibility.
3. Honesty and integrity--- Leaders build trusting relationships with followers by being truthful or non-deceitful and by
showing high consistency between word and deed.
4. Self-confidence--- Followers look to leaders for an absence of self-doubt. Leaders, therefore, need to show self-
confidence in order to convince followers of the rightness of their goals and decisions.
5. Intelligence--- Leaders need to be intelligent enough to gather, synthesize, and interpret large amounts of information,
and they need to be able to create visions, solve problems, and make correct decisions.
6. Job-relevant knowledge--- Effective leaders have a high degree of knowledge about the company, industry, and
technical matters. In-depth knowledge allows leaders to make well-informed decisions and to understand the
implications of those decisions.
7. Extraversion--- Leaders are energetic, lively people. They are sociable, assertive, and rarely silent or withdrawn