GENSANTOS FOUNDATION COLLEGE INC.

BSA & BSMA DEPARTMENT

Bulaong Ext. General Santos City, 9500

MANAGEMENT SCIENCE
CHAPTER 1: Introduction to Management

INTRODUCTION
In the present context, managing has become one of the most important areas of human activity because of
increasing role of large and complex organisations in the society. Because of their increasing role, the organisations have
attracted the attention of both practitioners and academicians to find out the solutions for business problems.

CONCEPT
Defining the term management precisely is not so simple because the term management is used in a variety of
ways. Being a new discipline, it has drawn concepts and principles from a number of disciplines such as economics,
sociology, psychology, anthropology, and statistics and so on.

Each group of contributors has treated management differently. For example, economists have treated
management as a factor of production; sociologists have treated it as a class or group of persons; practitioners have treated
it as a process comprising different activities.

DEFINITION
Management is the art of getting things done through and with people in formally organized groups – Koontz
Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest
way. – F.W. Taylor
Management is the art of securing maximum results with minimum effort so as to secure maximum prosperity and
happiness for both employer and employee and give the public the best possible service. – John Mee.
Management is the accomplishment of results through the efforts of other people. – Lawrence
Management is simply the process of decision making and control over the action of human beings for the
expressed purpose of attaining pre-determined goals. – Stanley V.
Management is a process involving planning, organizing, staffing, directing and controlling human efforts to
achieve stated objectives in an organization. - Unknown

From the above definitions, the following features are identified:

1. Organised Activities: Management is a process of organized activities. Without organized activities, two groups
of people cannot be involved in the performance of activities. Where a group of people are involved in working
towards a common objective, management comes into existence.
2. Existence of objectives: The existence of objectives is a basic criterion of e very human organization because all
organizations are deliberate and purposive creation and, therefore, they should have some objectives. Without
objectives, it becomes difficult to define the direction where organized group of activities would lead to.
3. Relationship among resources: Organised activities meant to achieve common goals are brought about to
establish certain relationships about the available resources. Resources include money, machine, material, men
and methods. All these resources are made available to those who manage the organization. Managers apply
knowledge, experience, principles for getting the desired results. Thus, the essence of management is integration
of various organisational resources.
4. Working with and through people: Management involves working with people and getting organisational
objectives achieved through them. The idea of working through people is interpreted in terms of assigning and
reassigning of activities to subordinates.
5. Decision Making: Management process involves decision making at various levels for getting things done
through people. Decision making basically involves selecting the most appropriate alternative out of the several.
If there is only one alternative, there is no question of decision making.

NATURE OF MANAGEMENT: The study and application of management techniques in managing the affairs of the
organization have changed its nature over a period of time. The following points will describe the nature of management.

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

1. Multidisciplinary: Management has been developed as a separate discipline, but it draws knowledge and concepts
from various disciplines like psychology, sociology, anthropology, economics, statistics, operations research etc.
Management integrates the idea and concepts taken from these disciplines and presents newer concepts which can
be put into practice for managing the organisations.
2. Dynamic nature of Principles: Principle is a fundamental truth which establishes cause and effect relationships of
a function. Based on integration and supported by practical evidences, management has framed certain principles.
However, these principles are flexible in nature and change with the changes in the environment in which an
organization exists.
3. Relative, Not absolute Principles: Management principles are relative, not absolute, and they should be applied
according to the need of the organization. Each organization may be different from others. The difference may
exist because of time, place, socio-cultural factors, etc.
4. Management: Science or Art: There is a controversy whether management is science or art. An ART is personal
skill of business affairs. Art is characterized by practical knowledge, personal creativity and skill. The more one
practices an art, the more professional one becomes. Management can be considered as an art because it satisfies
all these criterion of an art. A SCIENCE is a systematized body of knowledge of facts. It can establish cause-and-
effect relationships among various factors. It involves basic principles, which are capable of universal application.
Management can be considered as science because it satisfies all these criterion of a science.
5. Management as profession: Management has been regarded as a profession by many while many have suggested
that it has not achieved the status of a profession. Profession refers to a vocation or a branch of advanced learning
such as engineering or medicine.
6. Universality of management: Management is a universal phenomenon. However, management principles are not
universally applicable but are to be modified according to the needs of the situation.

IMPORTANCE OF MANAGEMENT
Management has been important to the daily lives of people and to the organizations. The importance of management
may be traces with the following.
1. Effective utilization of Resources: Management tries to make effective utilization of various resources. The
resources are scarce in nature and to meet the demand of the society, their contribution should be more for the
general interests of the society. Management not only decides in which particular alternative a particular resource
should be used, but also takes actions to utilize it in that particular alternative in the best way.
2. Development of Resources: Management develops various resources. This is true with human as well as non-
human factors. Most of the researchers for resource development are carried on in an organized way and
management is involved in these organized activities.
3. It ensures continuity in the organization: Continuity is very important in the organisations. Where there are no
proper guidelines for decision making continuity cannot be guaranteed. It is quite natural that new people join
while some others retire or leave the organization. It is only management that keeps the organization continuing.
4. Integrating various interest groups: In the organized efforts, there are various interest groups and they put
pressure over other groups for maximum share in the combined output. For example, in case of a business
organization, there are various pressure groups such as shareholders, employees, govt. etc. these interest groups
have pressure on an organization. Management has to balance these pressures from various interest groups.
5. Stability in the society: Management provides stability in the society by changing and modifying the resources in
accordance with the changing environment of the society. In the modern age, more emphasis is on new inventions
for the betterment of human beings. These inventions make old systems and factors mostly obsolete and
inefficient. Management provides integration between traditions and new inventions, and safeguards society from
the unfavourable impact of these inventions so that continuity in social process is maintained.

SCOPE OF MANAGEMENT:
Generally, the scope of management hovers around the following functional areas
1. Production management
2. Marketing management
3. Financial management
4. Personnel management
Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

PRODUCTION MANAGEMENT
Production means creation of utilities by converting raw material into final product by various scientific methods
and regulations. It is very important field of management. Various sub-areas of the production department are as follows:
PLANT LAY OUT AND LOCATION: This area deals with designing of plant layout, decide about the plant
location for various products and providing various plant utilities.
PRODUCTION PLANNING: Managers have to plan about various production policies and production methods.
MATERIAL MANAGEMENT: This area deals with purchase, storage, issue and control of the material required
for production department.
RESEARCH AND DEVELOPMENT: This area deals with research and developmental activities of
manufacturing department. Refinement in existing product line or develop a new product are the major activities.
QUALITY CONTROL: Quality control department works for production of quality product by doing various tests
which ensure the customer satisfaction.

MARKETING MANAGEMENT
Marketing management involves distribution of the product to the buyers. It may need number of steps. 3 sub-
areas are as follows:
ADVERTISING: This area deals with advertising of product, introducing new product in market by various
means and encourage the customer to buy these products.
SALES MANAGEMENT: Sales management deals with fixation of prices, actual transfer of products to the
customer after fulfilling certain formalities and after sales services.
MARKET RESEARCH: It involves in collection of data related to product demand and performance by research
and analysis of market.

FINANCE AND ACCOUNTING MANAGEMENT

Financial and accounting management deals with managerial activities related to procurement and utilization of
fund for business purpose. Its sub-areas are as follows:
FINANCIAL ACCOUNTING: It relates to record keeping of various financial transactions, their classification
and preparation of financial statements to show the financial position of the organization.
MANAGEMENT ACCOUNTING: It deals with analysis and interpretation of financial record so that
management can take certain decisions on investment plans, return to investors and dividend policy
TAXATION: This area deals with various direct and indirect taxes which an organization has to pay.
COSTING: Costing deals with recording of costs, their classification, and analysis and cost control.

PERSONNEL MANAGEMENT
Personnel management is the phase of management which deals with effective use and control of manpower.
Following are the sub-areas of personnel management:
PERSONNEL PLANNING: This deals with preparation inventory of available manpower and actual requirement
of workers in organization.
RECRUITMENT AND SELECTION: This deals with hiring and employing human being for various positions
as required.
TRAINING AND DEVELOPMENT: Training and development deals with process of making the employees
more efficient and effective by arranging training programmes. It helps in making team of competent employees
which work for growth of an organization.
WAGE ADMINISTRATION: It deals in Job evaluation, merit rating of Jobs and making wage and incentive
policy for employees.
INDUSTRIAL RELATION: It deals with maintenance of overall employee relation.

FUNCTIONS OF MANAGEMENT:
To achieve the organisational objectives managers at all levels of organization should perform different functions.
A function is a group of similar activities.
The list of management functions varies from author to author with the number of functions varying from three to
eight.

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

WRITERS MANAGEMENT FUNCTIONS

HENRY FAYOL Planning, Organizing, Commanding, Coordinating,
Controlling.
LUTHER GULLICK POSDCORD – Planning, Organizing, Staffing, Directing,
Coordinating, Reporting, Directing.
R. DAVIS Planning, Organizing, Controlling.
E.F.L. BREECH Planning, Organizing, Motivation, Coordinating,
Controlling.
KOONTZ Planning, Organizing, Staffing, Leading, Controlling.

Different authors presented different variations. By combining some of functions, these are broadly grouped into
Planning, Organising, Staffing, Directing, and Controlling.

1. PLANNING: Planning is the conscious determination of future course of action. This involves why an action,
what action, how to take action, and when to take action. Thus, planning includes determination of specific
objectives, determining projects and programs, setting policies and strategies, setting rules and procedures and
preparing budgets.
2. ORGANISING: Organising is the process of dividing work into convenient tasks or duties, grouping of such
duties in the form of positions, grouping of various positions into departments and sections, assigning duties to
individual positions, and delegating authority to each positions so that the work is carried out as planned. It is
viewed as a bridge connecting the conceptual idea developed in creating and planning to the specific means for
accomplishment these ideas.
3. STAFFING: Staffing involves manning the various positions created by the organizing process. It includes
preparing inventory of personal available and identifying the sources of people, selecting people, training and
developing them, fixing financial compensation, appraising them periodically etc.
4. DIRECTING: when people are available in the organization, they must know what they are expected to do in the
organization. Superior managers fulfil this requirement by communicating to subordinates about their expected
behaviour. Once subordinates are oriented, the superiors have continuous responsibility of guiding and leading
them for better work performance and motivating them to work with zeal and enthusiasm. Thus, directing
includes communicating, motivating and leading.
5. CONTROLLING: Controlling involves identification of actual results, comparison of actual results with expected
results as set by planning process, identification of deviations between the two, if any, and taking of corrective
action so that actual results match with expected results.

LEVELS OF MANAGEMENT
TOP LEVEL OF MANAGEMENT
It consists of board of directors, chief executive or managing director. The top management is the ultimate source
of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating
functions.
The role of the top management can be summarized as follows:
Top management lays down the objectives and broad policies of the enterprise.
It issues necessary instructions for preparation of department budgets, procedures, schedules etc.
It prepares strategic plans & policies for the enterprise.
It appoints the executive for middle level i.e. departmental managers.
It controls & coordinates the activities of all the departments.
It is also responsible for maintaining a contact with the outside world.
It provides guidance and direction.
The top management is also responsible towards the shareholders for the performance of the enterprise.

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

MIDDLE LEVEL OF MANAGEMENT

The branch managers and departmental managers constitute middle level. They are responsible to the top
management for the functioning of their department. They devote more time to organizational and directional functions. In
small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and
junior middle level management. Their role can be emphasized as:
They execute the plans of the organization in accordance with the policies and directives of the top management.
They make plans for the sub-units of the organization.
They participate in employment & training of lower level management.
They interpret and explain policies from top level management to lower level.
They are responsible for coordinating the activities within the division or department.
It also sends important reports and other important data to top level management.
They evaluate performance of junior managers.
They are also responsible for inspiring lower level managers towards better performance.

LOWER LEVEL OF MANAGEMENT

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section
officers, superintendent etc. According to R.C. Davis, ―Supervisory management refers to those executives whose work
has to be largely with personal oversight and direction of operative employees‖. In other words, they are concerned with
direction and controlling function of management. Their activities include:

Assigning of jobs and tasks to various workers.

They guide and instruct workers for day to day activities.
They are responsible for the quality as well as quantity of production.
They are also entrusted with the responsibility of maintaining good relation in the organization.
They communicate workers problems, suggestions, and recommendatory appeals etc. to the higher level and
higher level goals and objectives to the workers.
They help to solve the grievances of the workers.
They supervise & guide the sub-ordinates.
They are responsible for providing training to the workers.
They arrange necessary materials, machines, tools etc. for getting the things done.
They prepare periodical reports about the performance of the workers.
They ensure discipline in the enterprise.
They motivate workers.
They are the image builders of the enterprise because they are in direct contact with the workers.

FAYOL’S ADMNISTRATIVE MANAGEMENT

Henry Fayol is a French Industrialist and the father of modern operational management theory. Fayol recognized
the following organizational activities.

ORGANIZATIONAL ACTIVITIES: Fayol divided the activities of organization into six groups:
1. Technical (related to production)
2. Commercial (buying, selling and exchange)
3. Financial (search for capital and its optimum use)
4. Security (protection of property and person )
5. Accounting
6. Managerial (planning, organizing, commanding, coordinating, and controlling)

Among the above activities Fayol considered managerial activities are the most important for the success of business
and he concentrated more on that. His contributions are divided the following categories:
Qualities of a manager
General principles of management
Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

Elements of management

Managerial Qualities and Training: According to Fayol the following are the list of qualities required in a manager.
1. Physical (Health, Vigour and Health )
2. Mental (Ability to understand and learn, judgment , mental vigour and capability)
3. Moral (Energy, firmness, initiative, loyalty, tact etc.)
4. Educational
5. Technical (Peculiar to the function being performed)
6. Experience

GENERAL PRINCIPLES OF MANAGEMENT:

Fayol has given 14 principles of management. He has made distinction between management principles and
management elements. While management principles is a fundamental truth and establishes cause effect relationship,
elements of management denotes the function performed by a manager.

While giving the management principles, Fayol has emphasized two things.
1. The list of management principles is not exhaustive but suggestive and has discussed only those principles which
he followed on most occasions.
2. Principles of management are not rigid but flexible.

PRINCIPLES:

1. DIVISION OF WORK: It is helpful to take the advantage of specialization. Here, the work is divided among the
members of the group based on the employees skills and talents. It can be applied at all levels of the organization.
2. AUTHORITY AND RESPONSIBILITY: Fayol finds authority as a continuation of official and personal
factors. Official authority is derived from the manager’s position and personal authority is derived from personal
qualities such as intelligence, experience, moral worth, past services, etc., Responsibility arises out of assignment
of activity. In order to discharge the responsibility properly, there should be parity between authority and
responsibility.
3. DISCIPLINE: All the personal serving in an organization should be disciplined. Discipline is obedience,
application, behaviour and outward mark of respect shown by employees.
4. UNITY OF COMMAND: Unity of command means that a person should get orders from only one superior.
Fayol has considered unity of command as an important aspect in managing an organization. He says that
―should it be violated, authority is undermined, and discipline is in jeopardy, order disturbed, and stability
threatened.
5. UNITY OF DIRECTION: According to this principle, each group of activities with the same objective must
have one head and one plan. It is concerned with functioning of the organization I respect of grouping of activities
or planning. Unity of direction provides better coordination among various activities to be undertaken by an
organization.
6. SUBORDINATION OF INDIVIDUAL INTEREST TO GENERAL INTEREST: Individual interest must be
subordinate to general interest when there is conflict between the two. However factors like ambition, laziness,
weakness, etc., tend to reduce the importance of general interest. Therefore, superiors should set an example in
fairness and goodness.
7. REMUNERATION TO PERSONNEL: Remuneration to employees should be fair and provide maximum
possible satisfaction to employees and employers. Fayol did not favour profit sharing plan for workers but
advocated it for managers. He was also in favour of non-financial benefits.
8. CENTRALIZATION: Everything which goes to increase the importance of subordinate’s role is
decentralization; everything which goes to reduce it is centralization. The degree of centralization or
decentralization is determined by the needs of the company.
9. SCALAR CHAIN: There should be a scalar chain of authority and of communication ranging from the highest to
the lowest. It suggests that each communication going up or coming down must flow through each position in the

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

line of authority. It can be short-circuited only in special circumstances. For this purpose, Fayol has suggested
gang plank.
10. ORDER: This is a principle relating to the arrangement of things and people. In material order, there should be a
place for everything and everything should be in its place. Similarly, in social order, there should be the right man
in the right place.
11. EQUITY: Equity is the combination of justice and kindness. Equity in treatment and behaviour is liked by
everyone and it brings loyalty in the organization. The application of equity requires good sense, experience and
good nature.
12. STABILITY OF TENURE: No employee should be removed within short time. There should be reasonable
security of jobs. Stability of tenure is essential to get an employee accustomed to new work and succeeding in
doing it well
13. INITIATIVE: Within the limits of authority and discipline, managers should encourage their employees for
taking initiative. Initiative is concerned with thinking out and execution of a plan. Initiative increases zeal and
energy on the part of human beings.
14. ESPRIT DE CORPS: It is the principle of union is strength and extension of unity of command for establishing
team work. The manager should encourage esprit de corps among his employees.

HERZBERG’S MOTIVATION – HYGIENE THEORY:

Frederick Hertzberg conducted a structured interview programme to analyse the experience and feelings of 200
engineers and accountants in nine different companies in Pittsburg area, U.S.A. During the structured interview, they were
asked to describe a few previous job experiences in which they felt exceptionally good or exceptionally bad about jobs.

In his analysis, he found that there are some job conditions which operate primarily to dissatisfy employees when
the conditions are absent, however their presence does not motivate them in a strong way. Another set of job conditions
operates primarily to build strong motivation and high job satisfaction, but their absence rarely proves strongly
dissatisfying.

The first set of job conditions has been referred to as maintenance or hygiene factors and second set of job
conditions as motivational factors.

HYGIENE FACTORS:
According to Hertzberg, there are 10 maintenance factors. These are company policy and administration,
technical supervision, salary, job security, personal life, status, working conditions, interpersonal relationship with
superiors, interpersonal relationship with peers and interpersonal relationship with subordinates.

These maintenance factors are necessary to maintain at a reasonable level of satisfaction in employees. Any
increase beyond this level will not produce any satisfaction to the employees: however, any cut below this level will
dissatisfy them.

MOTIVATIONAL FACTORS:
These factors are capable of having a positive effect on job satisfaction often resulting in an increase in ones total
output. Hertzberg includes six factors that motivate employees. These are achievement, recognition, advancement; work
itself, possibility of growth and responsibility.

Most of the above factors are related with job contents. An increase in these factors will satisfy the employees:
however, any decrease in these factors will not affect their level of satisfaction. Since, these increased level of satisfaction
in the employees, can be used in motivating them for higher output.

MONETARY AND NON-MONETARY INCENTIVES TO MOTIVATE WORK TEAMS

The motivational factors that motivate a person to work and which can be used to enhance their performance can
be classified into two categories— monetary factors and non-monetary factors.
Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

MONETARY FACTORS
Monetary factors are extrinsic to work, such as the following:

1. SALARY OR WAGES: This is one of the most important motivational factors in an organization. Salaries and
wages should be fixed reasonably and paid on time.
2. BONUS: Bonus is an extra payment over and above salary, and it acts as an incentive to perform better. It is
linked to the profitability and productivity of the organization.
3. FINANCIAL INCENTIVES: The organization provides additional incentives to their employees such as medical
allowance, travelling allowance, house rent allowance, hard duty allowance and children educational allowance.
4. PROMOTION (MONETARY PART): Promotion is attached with increase in pay, and this motivates the
employee to perform better.
5. PROFIT SHARING: This is an arrangement by which organizations distribute compensation based on some
established formula designed around the company’s profitability.
6. STOCK OPTION: This is a system by which the employee receives shares on a preferential basis which results in
financial benefits to the employees.

NON-MONETARY FACTORS
Non-monetary factors are rewards intrinsic to work, such as the following:

1. STATUS: An employee is motivated by better status and designation. Organizations should offer job titles that
convey the importance of the position.
2. APPRECIATION AND RECOGNITION: Employees must be appreciated and reasonably compensated
for all their achievements and contributions.
3. WORK-LIFE BALANCE: Employees should be in a position to balance the two important segments of their
life—work and life. This balance makes them ensure the quality of work and life. A balanced employee is a
motivated employee.
4. DELEGATION: Delegation of authority promotes dedication and commitment among employees. Employees are
satisfied that their employer has faith in them and this motivates them to perform better.
5. WORKING CONDITIONS: Healthy working conditions such as proper ventilation, proper lighting and proper
sanitation improve the work performance of employees.
6. JOB ENRICHMENT: This provides employees more challenging tasks and responsibilities. The job of the
employee becomes more meaningful and satisfying.
7. JOB SECURITY: This promotes employee involvement and better performance. An employee should not be kept
on a temporary basis for a long period.

SOCIAL RESPONSIBILITY OF MANAGEMENT

Social responsibility refers to the process with includes several activities from providing safe products and
services to giving apportion of the company‘s profits to welfare organizations.

RESPONSIBILITY TOWARDS SHAREHOLDERS: The business enterprise has the responsibility to provide fair
return on capital to the shareholders. The firm must provide them regular, accurate, and full information about the
working of enterprise in order to fulfil and encourage their interest in the affairs of the company.
RESPONSIBILITY TOWARDS CONSUMERS: The management has to provide quality products and services to the
customers at reasonable prices. It should consider customer suggestions more effectively through consumer satisfaction
survey.
RESPONSIBILITY TOWARDS EMPLOYEES: Good working conditions motivate workers to contribute their best. It
is the responsibility of the management recognizes their unions and respects their right to associate with a union of their
choices.

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

RESPONSIBILITY TOWARDS CREDITORS: The business has to repay the loans it has taken from the financial
institutions as per there payments schedule. Also, it should inform the creditors about the developments in the company
from time-to- time.
RESPONSIBILITY TOWARDS GOVERNMENT: The business firm has to pay its taxes and be fair in its endeavours.
It should also support the government in community development projects.
RESPONSIBILITY TOWARDS COMPETITORS: The business firm should always maintain the highest ethical
standards and maintain cordial relations with each of the competitors, which is a critical and sensitive segment.
Responsibility towards public: Business units have tremendous responsibility towards the general public to support the
cause of community development. Most of the companies maintain public relations departments exclusively to maintain
good relations with the community.

LEADERSHIP

CONCEPT
Leadership is the process of influencing the behaviour of other to work willingly an enthusiastically for achieving
predetermined goals.
DEFINITION
Leadership is interpersonal influence exercised in a situation and directed through communication process,
towards the attainment of a specified goal or goals‖. – Tennenbaum.
Leadership is the process of influencing and supporting others to work enthusiastically toward achieving
objectives‖. – Barnard Key.

QUALITIES OF SUCCESSFUL LEADER:

1. A good leader has an exemplary character. It is of utmost importance that a leader is trustworthy to lead others. A
leader needs to be trusted and be known to live their life with honesty and integrity. A good leader ―walks the
talk and in doing so earns the right to have responsibility for others. True authority is born from respect for the
good character and trustworthiness of the person who leads.
2. A good leader is enthusiastic about their work or cause and also about their role. People will respond more openly
to a person of passion and dedication. Leaders need to be able to be a source of inspiration, and be a motivator
towards the required action or cause. Although the responsibilities and roles of a leader may be different, the
leader needs to be seen to be part of the team working towards the goal. This kind of leader will not be afraid to
roll up their sleeves and get dirty.
3. A good leader is confident. In order to lead and set direction a leader needs to appear confident as a person and in
the leadership role. Such a person inspires confidence in others and draws out the trust and best efforts of the team
to complete the task well. A leader who conveys confidence towards the proposed objective inspires the best
effort from team members.
4. Leader also needs to function in an orderly and purposeful manner in situations of uncertainty. People look to the
leader during times of uncertainty and unfamiliarity and find reassurance and security when the leader portrays
confidence and a positive demeanour.
5. Good leaders are tolerant of ambiguity and remain calm, composed and steadfast to the main purpose. Storms,
emotions, and crises come and go and a good leader takes these as part of the journey and keeps a cool head.
6. A good leader as well as keeping the main goal in focus is able to think analytically. Not only does a good leader
view a situation as a whole, but is able to break it down into sub parts for closer inspection. Not only is the goal in
view but a good leader can break it down into manageable steps and make progress towards it.
7. A good leader is committed to excellence. Second best does not lead to success. The good leader not only
maintains high standards, but also is proactive in raising the bar in order to achieve excellence in all areas.

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

LEADERSHIP STYLES – Leadership styles refer to a leader’s behaviour. Behavioural pattern which the leader reflects
in his role as a leader is often described as the style of leadership. It is the result of the philosophy, personality and
experience of the leader. The important leadership styles are as follows:-

1. Autocratic (or) Authoritarian leaders

2. Participative (or) Democratic leaders
3. Free rein (or) Laiser faire leaders

AUTOCRATIC LEADERSHIP STYLE

This is also known as authoritarian, directive style. In this style manager centralizes decision-making power in
him. He structures the complete work situation for his employees. He does not entertain and suggestions or initiative from
subordinates. He gives orders and assigns tasks without taking subordinates opinion. There are three categories of
autocratic leaders.

STRICT AUTOCRAT: - He follows autocratic styles in a very strict sense. His method of influencing
subordinates behaviour is through negative motivation that is by criticizing subordinates, imposing penalty etc.
BENEVOLENT AUTOCRAT: - He also centralizes decision making power in him, but his motivation style is
positive. He can be effective in getting efficiency in man situations. Some like to work under strong authority
structure and they drive satisfaction by this leadership.
INCOMPETENT AUTOCRAT: - Sometimes, superiors adopt autocratic leadership style just to hide their in
competency, because in other styles they may exposed before their subordinates. However, this cannot be used for
a long time.

ADVANTAGES:
It provides strong motivation and reward to manager.
It permits very quick decisions.
Less competent subordinates also have scope to work in the organisation.

DISADVANTAGES:
People in the organisation dislike it especially when it is strict and the motivational style is negative.
Employees lack motivation frustration, low morale and conflict develops in the organisation.
There is more dependence and less individuality in the organisation.

A B C

PARTICIPATIVE LEADERSHIP STYLE

It is also called as democratic, consultative or idiographic leadership style. In this style the manager decentralizes
his decision- making process. Instead of taking unilateral decision he emphasizes consultation and participation of his
subordinates. He can win the cooperation of his group and can motivate them effectively and positively.

ADVANTAGES
Employees are highly motivated.
The productivity of employees is very high.
Subordinates share the responsibility with the superior and try to safeguard them also.
Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business
 GENSANTOS FOUNDATION COLLEGE INC.
BSA & BSMA DEPARTMENT
Bulaong Ext. General Santos City, 9500

DISADVANTAGES
Complex nature of organisation requires as through understanding of its Problems which lower-level employees
may not be able to do.
Some people in the organisation want minimum interaction with their superior.
Some leaders may use this style as a way of avoiding responsibility.

D M B

FREE-REIN LEADERSHIP
A free-rein leader does not lead, but leaves the group entirely to itself as shown in the following figure.

A B

C D

In this style, manager once determines policy, programmes, and limitations for action and the entire process is left
to subordinates group members perform everything and the manager usually maintains contacts with outside persons to
bring the information and materials which the group needs.

The following figure shows the spectrum of a wide variety of leadership styles moving from a very authoritarian
style at one end to a very democratic style at the other end, as suggested by Tannenbaum and Warren H.Schmidt.

***END OF CHAPTER 1***

Prepared by:
Willy Mark Mesagrande Taer
Faculty – College of Business