Chapter - Leading

Sk Alamgir Hossain
Assistant Professor
Departmkent of Finance
Jagannath University
Leading

• To cause people to take effective actions for attaining

organizational goals (willingly)
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The Function of Leading

3
Deciding
• To arrive at conclusions and
judgements
• To assure that the quality of
decisions made remains high

4
Types of Decisions
• Spontaneous Decisions - Intuitive, hunch or
gut instinct based
• Reasoned Decisions - Based on systematic
studies and logical analyses (to the extend
possible): (1) Assess facts and evaluate
alternatives, (2) Use full mental resources,
(3) Emphasize creative problem-solving, (4)
Think consistently, (5) Minimize the
probability of errors (downside risks) 5
Why Decision Making is
Difficult?
• Management Problems - Ill-defined, of wide
scope, of constantly changing nature,
involving people of unpredictable behavior
• Data/Facts - Insufficient, of poor quality,
excessive, and not to be analyzed and
interpreted in time and within budget
• Impact of decisions - Dependent on people’s
opinion, which change in time 6
Why Decision Making is
Difficult (cont’d) ?
• Nature of Decisions - Compromises among
alternatives, with validity changing with time
• Decision Implementation - Affected by
consensus and commitment of affected people
• Complexity of Decisions – Critically important
decisions involve multiple management levels,
thus requiring coordination
7
Criteria for Good Decisions
• Achieve stated purpose - correct/change the situation which
created the noted problem
• Be feasible to implement - meaningful with respect to
resources required and the value created
• Have no or limited adverse consequences -not causing major
disasters to unit or company in short- and long-term

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Guidelines for Decision Making

• Study management cases for acquiring close to real-world

experience in decision making
• Prioritize problems in need of decisions, skip those with minor
significance or impact
• Apply a rational process to guide the decision making process
• Involve those to be impacted by the decision - consensus building
foster implementation

9
Guidelines for Decision Making
• Make decisions based on incomplete/ uncertain information
on hand, assumptions introduced
• Take the necessary risks
• Delay decision making until the last allowable moment, but
within the applicable deadlines, avoid making no decision
which is a sign of poor leadership

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Rational Decision Making
Process

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Rational Decision Making
Process
• Assess the apparent problem - based on symptoms observed
• Collect facts - what, how, who, where, when, why, from people
who have direct knowledge of the problem at hand :
“Management by Walking Around”
• Define the real problem - deviation from norm, performance
metrics to measure success

12
Rational Decision Making
Process (cont’d)
• Develop alternatives to achieve the desired resolution -
brainstorming, innovation
• Select optimal solution (logical process, minimizing risks,
maximizing probability of success)
• Set course of action to implement decision, by allocating
resources, specifying action steps and define target dates of
completion

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Decisions Not to Make
• Decisions - Not pertinent/applicable to problems at this time
• Decisions - Can not be implemented effectively (business
priority, resources constraints, value created)
• Decisions - To be made by others

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Communicating
• To create
understanding and
acceptance by
conveying facts,
viewpoints,
impression and/or
feelings
15
Guidelines for Communication
• Communicate with a clear purpose
• Select proper form to communicate - face-to-face talk, phone
conversation, emails, video-conference, staff meeting, written
memos, web-posting, net-meeting
• Be honest and open, welcome suggestions, offer pertinent
information to dispel fears
• Keep communications channels open

16
How to Communicate?

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Asking
• Asking open-ended insightful
questions to gain knowledge
and to improve
understanding of the
situation at hand
• Quality of questions is an
clear indication of the
questioner’s grasp of the
situation at hand
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Telling

• Offer information to keep people (peers, employees, bosses,

supply chain partners, customers) informed about matters of
concern to them
• Judgement is needed as to what to tell and what not (“Need to
Know” paradigm), seek balance between (1) trust-creation and
no surprise versus (2) control over information

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Listening
• Remain focused in listening to the subtext and true meaning
of the exchange
• Maintain eye contact
• Exercise self-discipline to control own urge to talk and avoid
interrupting others

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Understanding
• To hear by the head and to feel by the heart
• Assess the degree of sincerity - verbal intonation, facial
expression, body language
• Recognize shared meaning (emotional and logical)

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Common Barriers to
Communications
• Semantics
• Selective Seeing
• Selective Listening
• Emotional Barriers

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Common Barriers to
Communications
• Interpretation of Semantics (words/terms
may have multiple meanings)
• Selective Seeing - See only what one wants to
see
• Selective Listening - Hear only what one
wants to hear (screen out ideas divergent to
own opinion or self-interest)
• Emotional Barriers (strong attitude and
feelings, personal biases) 23
Techniques of Communicating
• Know what one wants to say and say what
one means (some people want to impress
others, not to express themselves) -
“The answer is definitely a maybe”
“It is not probable, but still possible”
• Know the audience (tailoring to the receiver’s
frame of mind - belief, background, attitudes,
experience and vocabulary)
24
Techniques of Communicating
(cont’d)
• Get favorable attention - Taking into account
of receiver’s interest and emotional standing
• Get understanding - Leading the exchange
from present to future, familiar to unfamiliar,
and agreeable to disagreeable
• Get retention - Repeat the ideas (Rule of
Four)
• Get feedback - Asking questions
• Get action to enhance communications 25
Motivating
• To motivate is to
apply a force that
excites and drives
an individual to
act, in ways
preferred by the
manager/leader. 26
How to Motivate
• Inspire - Infuse a spirit of
willingness (By work
done, leadership traits,
examples set)
• Encourage - Stimulate
through praise, approval
and help
• Impel - Force (Coercion,
compulsion,
27
punishments)
Techniques to Enhance
Motivation
• Participation - Promoting ownership of idea, project, task and
program
• Communication - Objectives, metrics
• Recognition - Fair appraisals inducing loyalty and confidence
• Delegated Authority - Convey trust
• Reciprocated Interest - Show interest in Results

28
Keys for Successful Motivation
• Accept people as they are, not try to change them - personal
preference, values and standards
• Recognize that other have drives to fulfill own needs - self-
actualization, recognition, ego, self-esteem, group association,
etc..
• Motivate by addressing the unsatisfied needs - Maslow Need
Hierarchy Model

29
Selecting
• By selecting people,
managers gain staff with
right skills, dedication,
value systems,
personality, and win
their loyalty over time
• Associate themselves
with the right mentors
and leaders
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Developing
• Purpose: To improve knowledge, attitude and skills of
employees
• Knowledge: Cognizance of facts, truths and other information
• Attitude: Customary dispositions toward people, things,
situations and information
• Skills: Ability to perform specialized work with recognized
competence

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How to Develop People

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Guidelines for Employee
Development
• Emphasize employee’s role in development (good for the
individual and company)
• Appraise present performance and future potential
• Counsel for improvement (to induce self-improvement, set
example)
• Develop Successors - Career Planning Plan of Some
Progressive Companies

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Profile of Successful Leaders

• Strong drive for responsibility • Willingness to accept

and task completion consequence of decision
• Vigor and persistence in and action
pursuit of goals • Readiness to absorb
• Venturesomeness and interpersonal stress
originality in problem-solving • Willingness to tolerate
• Drive to exercise initiative in frustration and delay
social situation • Capacity to structure
• Self-confidence and sense of social interaction systems
personal identity to the purpose at hand 34
Leadership Definition
• Leadership is:
• A social influence process.
• Is the process of directing and influencing the task-related
activities of group members

12–35
There are four important points of leadership:-

1. Leadership involves other people

2. Leadership involves unequal distribution of power
3. Leadership is the ability to use the different forms of power
4. Leadership is about values

12–36
Leadership Approaches
I. Trait Approach
o Leadership Traits and Skills Focus
• The assumption that some people are born with certain physical
characteristics, aspects of personality, and aptitudes that make them
successful leaders.
• Physical characteristics: height and appearance
• Personality: self-esteem, dominance and emotional stability
• Aptitudes: general intelligence, verbal fluency and creativity

12–37
I. Trait Approach (cont’d)
• The trait approach to leadership is based on early leadership research
that assume that a good leader is born, not made.
• However, evaluation of the studies shows that people who became
effective leader do not have any special trait that distinguish them
from non-leaders.
• Thus, people today believe that individuals can be trained to be good
leaders
• Leaders are made, not born.

12–38
II. Behavioral Approach
• Examines what effective leaders do rather than what effective leaders
are.
• Defines a leader’s effectiveness based on two orientations:
• Task orientation or job centered style
• Setting performance goals, giving directions, and supervising
performance.
• More concerned with getting the job done to his satisfaction
• Employee orientation or people centered style
• Behavior that shows empathy for concerns and feelings, supportive of
needs, and showing trust.
• Friendly and respectful relationship with employees, would try to motivate
subordinates rather than to control them.

12–39
II. Behavioral Approach (cont’d)
*
• The behavioral approach is supported by below studies:

Behavioral
Approach

The Managerial Grid (by

The Ohio State
Robert Blake and Jane
University (OSU studies)
Mouton)

The University of Michigan

(Michigan studies) 12–40
II. Behavioral Approach (cont’d)
*
The Ohio State University (OSU studies)
➢ OSU studies concluded that leaders exhibit two main types
of behavior:
I. Structure Behavior (task-oriented)
• The leadership activity that establishes procedures that employees
should follow in performing their tasks or jobs.
II. Consideration Behavior (employee-oriented)
• The leadership behavior that shows friendship, trust, respect and
warmth in the relationship between leaders and employees.

12–41
II. Behavioral Approach (cont’d)
* • OSU studies resulted in a model
that shows four leadership styles.
• i.e. A high structure/low
consideration leadership style
emphasizes on structure
behavior and place less
attention to consideration
behavior.
• Low structure/high consideration –
highest employee satisfaction,
lowest turnover rates
• High structure/low consideration –
had high grievance, high turnover
rates 12–42
 II. Behavioral Approach (cont’d)
*
The University of Michigan (Michigan studies)
➢ Michigan studies concluded two types of leader behavior:
I. Job-centered Behavior
• Interested in the job that subordinate is doing and how well the
subordinate performs the job.
• Leaders set rigid work standards, prescribe work methods to be
followed, and closely supervise subordinate work.
II. Employee-centered Behavior
• Interested to the personal needs of subordinates and build
cooperative work teams that are satisfying to subordinates.
• Leaders encourage subordinates participation and inspire trust
and respect among subordinates.
➢ The most productive work groups have leaders who were employee-
centered rather than job-centered. 12–43
II. Behavioral Approach (cont’d)
*
The Managerial Grid (Robert Blake & Jane Mouton)

• Managerial Grid identifies five leadership behaviors based on task-

oriented and employee-oriented styles.

• The grid identifies a range of management behaviors based on the

various ways that task-oriented and employee-oriented styles can
interact with one another (each expressed on a scale of 1 to 9).

12–44
II. Behavioral Approach (cont’d)
➢ *
The five leadership styles practiced by managers.

▪ Point 1,1 – Impoverished Management

↓ concern for people, ↓ concern for
tasks, leader does not play his leadership
role, makes minimum effort to get work
done, also known as laissez-faire
management
▪ Point 1,9 – Country Club Management
↑ concern for people, ↓ concern for
tasks, this leadership style believes that
giving attention to people’s needs will
lead to a comfortable and friendly
organizational atmosphere
12–45
II. Behavioral Approach (cont’d)
➢ *
The five leadership styles practiced by managers.

▪ Point 5,5 – Middle-of-the-

Road/Organization Man Management
concern for people = concern for tasks,
adequate organization performance is
possible through balancing work and
maintaining morale of employees at a
satisfying level
▪ Point 9,1 – Task/Authoritarian/Autocratic
Management
↓ concern for people, ↑ concern for
tasks, manager stresses on operating
efficiently through controls, wants work
schedule to be followed, least concern
12–46
about employees welfare
II. Behavioral Approach (cont’d)
➢ *
The five leadership styles practiced by managers.

▪ Point 9,9 – Team / Democratic /

Participative/ Supportive Management
↑ concern for people, ↑ concern for
tasks, work accomplishment is from
committed people, interdependence
through common interests as well as
relationship of trust and respect
❖ Style 9,9 is the most effective
management style - improved
performance, low absenteeism and
turnover, and high employee
satisfaction.
12–47
III.Contingency Approach *
1. Path-Goal Approach
➢ Formulated by Martin G. Evans and Robert J. House.
➢ Based on expectancy model, which states employee’s
motivation depends on his expectation of reward or the
attractiveness of the reward.
➢ Managers determine the availability of “goals” (rewards)
and the “paths” that will earn those rewards.
➢ Leader can increase employee effort and productivity by
clarifying performance goals and the path to be taken to
achieve those goals.

12–48
III.Contingency Approach
(cont’d) *
According to Path-Goal theory of leadership, leaders show
four primary types of behavior:
I. Directive behavior
▪ Telling followers what to do and how to do it, leader
indicates what performance goals exist and what
must be done to achieve it.
II. Supportive behavior
▪ Being friendly with followers and showing interest in
them as human beings. Leader shows sensitivity to
the personal needs of followers.

12–49
III.Contingency Approach
III.
(cont’d) *
Participative behavior
▪ Seeking suggestions from followers regarding business
operations, followers involve in decision making, help to
determine rewards available and what they must do to
earn those rewards.
IV. Achievement behavior
▪ Aimed at setting challenging goals for followers to reach
and expressing confidence that they will face up to the
challenge. Leader focuses on making challenging goals for
employees to achieve.
❖ Path-goal theory explains why a particular leadership style is
more effective in one situation than in another and it
recommends flexibility in dealing with different employee
12–50
problems and situations.
III.Contingency Approach
(cont’d) *
2. Life Cycle or Situational Approach
➢ Developed by Hersey and Blanchard.
➢ Leadership styles should reflect primarily on the maturity
level of the followers.
▪ Maturity is the ability of followers to perform their job
independently, the education/experience and skills a follower has
relevant to particular tasks, to assume additional responsibility and
to desire to achieve success.

➢ Describes how leaders should adjust leadership style in

response to their subordinates’ desire for achievement,
experience, ability and willingness to accept responsibility.
12–51
III.Contingency Approach
(cont’d) * Phases in Life-Cycle Approach
PHASE 3 PHASE 2 ➢ Phase 1 (HT/LR)
Telling style: the leader
provides specific instructions
and closely supervises
performance.
➢ Phase 2 (HT/HR)
PHASE 4 PHASE 1
Selling style: the leader explains
decisions and provides
opportunities for clarification.

12–52
III.Contingency Approach
(cont’d) * Phases in Life-Cycle Approach
PHASE 3 PHASE 2 ➢ Phase 3 (LT/HR)
Participating style: the leader
shares ideas and maintains
two-way communication to
encourage and support the
skills subordinates have
PHASE 4 PHASE 1 developed.
➢ Phase 4 (LT/LR)
Delegating style: the leader
provides subordinates with
few task or relations
behaviors. 12–53
Guidelines for Superior
Leadership
• (1) Maintain absolute integrity
• (2) Be Knowledgeable
• (3) Declare expectations
• (4) Show uncommon commitment
• (5) Get out in front
• (6) Expect Positive results
• (7) Take care of people
• (8) Put duty before self-interests 54