3.

0 Functions of Management:

3.1 Planning, Organizing, Staffing, Directing & Controlling

1. Planning

It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre-determined
goals.

According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do.
It bridges the gap from where we are & where we want to be”.

A plan is a future course of actions. It is an exercise in problem solving & decision making.

Planning is determination of courses of action to achieve desired goals. Thus, planning is a

systematic thinking about ways & means for accomplishment of pre-determined goals.

Planning is necessary to ensure proper utilization of human & non-human resources. It is all
pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks,
wastages etc.

Know more about - Planning Function of Management

2. Organizing

It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals.

According to Henry Fayol, “To organize a business is to provide it with everything useful or its
functioning i.e. raw material, tools, capital and personnel’s”.

To organize a business involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:

o Identification of activities.
o Classification of grouping of activities.
o Assignment of duties.
o Delegation of authority and creation of responsibility.
o Coordinating authority and responsibility relationships.

Know more about - Organizing Function of Management

3. Staffing

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 It is the function of manning the organization structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc.

The main purpose of staffing is to put right man/woman on right job i.e. square pegs in
square holes and round pegs in round holes.

According to Koontz & O’Donell, “Managerial function of staffing involves manning the
organization structure through proper and effective selection, appraisal & development of
personnel to fill the roles designed un the structure”. Staffing involves:

o Manpower Planning (estimating man power in terms of searching, choose the person and
giving the right place).
o Recruitment, Selection & Placement.
o Training & Development.
o Remuneration.
o Performance Appraisal.
o Promotions & Transfer.
4. Directing

It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes.

It is considered life-spark of the enterprise which sets it in motion and action of people, because
planning, organizing and staffing are the mere preparations for doing the work.

Direction is that inter-personnel aspect of management which deals directly with influencing,
guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:

o Supervision
o Motivation
o Leadership
o Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.

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 Communications- is the process of passing information, experience, opinion etc from one person
to another. It is a bridge of understanding.

Know more about - Directing Function of Management

5. Controlling

It implies measurement of accomplishment against the standards and correction of deviation if

any to ensure achievement of organizational goals.

The purpose of controlling is to ensure that everything occurs in conformities with the standards.
An efficient system of control helps to predict deviations before they actually occur.

According to Theo Haimann, “Controlling is the process of checking whether or not proper
progress is being made towards the objectives and goals and acting if necessary, to correct any
deviation”.

According to Koontz & O’Donell “Controlling is the measurement & correction of performance
activities of subordinates in order to make sure that the enterprise objectives and plans desired to
obtain them as being accomplished”. Therefore controlling has following steps:

a. Establishment of standard performance.

b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out deviation if any.
d.

3.1.1 Planning as a function of Management

Planning means looking ahead and chalking out future courses of action to be followed. It is a
preparatory step. It is a systematic activity which determines when, how and who is going to perform a
specific job. Planning is a detailed programme regarding future courses of action.

It is rightly said “Well plan is half done”. Therefore planning takes into consideration available &
prospective human and physical resources of the organization so as to get effective co-ordination,
contribution & perfect adjustment. It is the basic management function which includes formulation of
one or more detailed plans to achieve optimum balance of needs or demands with the available
resources.

According to Urwick, “Planning is a mental predisposition to do things in orderly way, to think before
acting and to act in the light of facts rather than guesses”. Planning is deciding best alternative among
others to perform different managerial functions in order to achieve predetermined goals.

According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is
to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible
things to occur which would not otherwise occur”.

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Steps in Planning Function

Planning function of management involves following steps:-

1. Establishment of objectives
a. Planning requires a systematic approach.
b. Planning starts with the setting of goals and objectives to be achieved.
c. Objectives provide a rationale for undertaking various activities as well as indicate
direction of efforts.
d. Moreover objectives focus the attention of managers on the end results to be achieved.
e. As a matter of fact, objectives provide nucleus to the planning process. Therefore,
objectives should be stated in a clear, precise and unambiguous language. Otherwise the
activities undertaken are bound to be ineffective.
f. As far as possible, objectives should be stated in quantitative terms. For example, Number
of men working, wages given, units produced, etc. But such an objective cannot be stated
in quantitative terms like performance of quality control manager, effectiveness of
personnel manager.
g. Such goals should be specified in qualitative terms.
h. Hence objectives should be practical, acceptable, workable and achievable.
2. Establishment of Planning Premises
a. Planning premises are the assumptions about the lively shape of events in future.
b. They serve as a basis of planning.
c. Establishment of planning premises is concerned with determining where one tends to
deviate from the actual plans and causes of such deviations.
d. It is to find out what obstacles are there in the way of business during the course of
operations.
e. Establishment of planning premises is concerned to take such steps that avoids these
obstacles to a great extent.
f. Planning premises may be internal or external. Internal includes capital investment policy,
management labour relations, philosophy of management, etc. Whereas external includes
socio- economic, political and economical changes.
g. Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action
a. When forecast are available and premises are established, a number of alternative course
of actions have to be considered.
b. For this purpose, each and every alternative will be evaluated by weighing its pros and
cons in the light of resources available and requirements of the organization.
c. The merits, demerits as well as the consequences of each alternative must be examined
before the choice is being made.
d. After objective and scientific evaluation, the best alternative is chosen.
e. The planners should take help of various quantitative techniques to judge the stability of
an alternative.

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 4. Formulation of derivative plans
a. Derivative plans are the sub plans or secondary plans which help in the achievement of
main plan.
b. Secondary plans will flow from the basic plan. These are meant to support and expediate
the achievement of basic plans.
c. These detail plans include policies, procedures, rules, programmes, budgets, schedules,
etc. For example, if profit maximization is the main aim of the enterprise, derivative plans
will include sales maximization, production maximization, and cost minimization.
d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.
5. Securing Co-operation
a. After the plans have been determined, it is necessary rather advisable to take subordinates
or those who have to implement these plans into confidence.
b. The purposes behind taking them into confidence are :-
i. Subordinates may feel motivated since they are involved in decision making
process.
ii. The organization may be able to get valuable suggestions and improvement in
formulation as well as implementation of plans.
iii. Also the employees will be more interested in the execution of these plans.
6. Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. After the selected plan is implemented, it is important to appraise its effectiveness.
c. This is done on the basis of feedback or information received from departments or persons
concerned.
d. This enables the management to correct deviations or modify the plan.
e. This step establishes a link between planning and controlling function.
f. The follow up must go side by side the implementation of plans so that in the light of
observations made, future plans can be made more realistic.

Characteristics of Planning

1. Planning is goal-oriented.
a. Planning is made to achieve desired objective of business.
b. The goals established should general acceptance otherwise individual efforts & energies
will go misguided and misdirected.
c. Planning identifies the action that would lead to desired goals quickly & economically.
d. It provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture
once again Indian Car Market by launching diesel models.
2. Planning is looking ahead.
a. Planning is done for future.
b. It requires peeping in future, analyzing it and predicting it.

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 c. Thus planning is based on forecasting.
d. A plan is a synthesis of forecast.
e. It is a mental predisposition for things to happen in future.
3. Planning is an intellectual process.
a. Planning is a mental exercise involving creative thinking, sound judgement and
imagination.
b. It is not a mere guesswork but a rotational thinking.
c. A manager can prepare sound plans only if he has sound judgement, foresight and
imagination.
d. Planning is always based on goals, facts and considered estimates.
4. Planning involves choice & decision making.
a. Planning essentially involves choice among various alternatives.
b. Therefore, if there is only one possible course of action, there is no need planning because
there is no choice.
c. Thus, decision making is an integral part of planning.
d. A manager is surrounded by no. of alternatives. He has to pick the best depending upon
requirements & resources of the enterprises.
5. Planning is the primary function of management/Primacy of Planning.
a. Planning lays foundation for other functions of management.
b. It serves as a guide for organizing, staffing, directing and controlling.
c. All the functions of management are performed within the framework of plans laid out.
d. Therefore planning is the basic or fundamental function of management.
6. Planning is a Continuous Process.
a. Planning is a never ending function due to the dynamic business environment.
b. Plans are also prepared for specific period f time and at the end of that period, plans are
subjected to revaluation and review in the light of new requirements and changing
conditions.
c. Planning never comes into end till the enterprise exists issues, problems may keep
cropping up and they have to be tackled by planning effectively.
7. Planning is all Pervasive.
a. It is required at all levels of management and in all departments of enterprise.
b. Of course, the scope of planning may differ from one level to another.
c. The top level may be more concerned about planning the organization as a whole whereas
the middle level may be more specific in departmental plans and the lower level plans
implementation of the same.
8. Planning is designed for efficiency.
a. Planning leads to accompishment of objectives at the minimum possible cost.
b. It avoids wastage of resources and ensures adequate and optimum utilization of resources.
c. A plan is worthless or useless if it does not value the cost incurred on it.
d. Therefore planning must lead to saving of time, effort and money.
e. Planning leads to proper utilization of men, money, materials, methods and machines.
9. Planning is Flexible.
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 a. Planning is done for the future.
b. Since future is unpredictable, planning must provide enough room to cope with the
changes in customer’s demand, competition, govt. policies etc.
c. Under changed circumstances, the original plan of action must be revised and updated to
male it more practical.
d.

Essential Elements of Good and Effective Planning

By good and effective planning, we mean such a plan which is capable of achieving the predetermined
objectives and goals. The management experts have expressed various thoughts on the criteria and
measurement of effective planning.

1. Simple

Good planning should be simple.

Planning should be so simple and understandable that every employee of the institution may easily
understand and implement it and may give his valuable contribution to the achievements of the goals.

The simplicity of the plan is quite essential, in all those areas of human activities, where largely
organized activities are required.

2. Well Defined Objectives

A good plan is based on well-defined objectives.

These objectives, which may be for the functional departments of the total organization or for the
individual should be fully unambiguous and rational.

If the objectives are not clear, neither the enterprise may function successfully and efficiently, nor
other departments may provide their Corporation in the right direction.

3. Comprehensive

ehensive and intensive.

It should incorporate various items, time limits, objectives, policies, procedures, rules, powers, and
responsibilities of the officers and employees, human and organizational activities.

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Similarly, all those activities and requirements, which are required for achieving the goal should also
be sufficiently described within the plan.

4. Flexibility

Effective planning should also have the element of flexibility.

Flexibility means introducing changes according to the changed circumstances and requirements.
Planning should be flexible, so that changes may be affected, according to changing circumstances,
without incurring heavy financial and work efficiency losses.

5. Economical

We know that planning is a process of selections, in which the best alternative is selected from various
alternatives.But, according to his principle of planning, the selection process should be economical, so
that the objectives of the organization may be achieved, at low costs.
A plan which is good but expensive is not regarded well.Hence, for the economic plan, it is necessary
that minimum sources may be spent on the formulation, execution, and evolution of the plan.

6. Stability

A good plan should also have the quality of stability, which means that due to general changes, the
plan may not require basic changes and general changes may not deviate the determined plans.

Hence, for the stability of any plan, it is necessary that it is should be formulated in consonance with
the long-term circumstances and hence this should base on forecast prepared on the basis of proper,
rational and factual facts regarding futures circumstances, problems, and difficulties.

7. Free from Ambiguity

An essential element of a good plan is that it should be free from ambiguity.So that it may be
understood and executed easily.If the plan is ambiguous, it will lead to differences between the officers
and the employees, various doubts will arise and several problems with emerging and efficient
implementation and operation of such plans will not be possible.

Related: 21 Importance of Study of Business Environment (Explained).

8. Balanced

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For effective and good planning, it should be balanced.This balance should be in use of resources for
achieving the objectives, in long term and short term plans and in all departmental plans.If some areas
or functional area is left in the plan or is given relatively less attention, the achievement of the
objectives on the basis of the plan may be full of problems.

9. Practicable

Effective planning should also have the quality of being practical.elements of good and effective
planning

Hence, the plan should be such, which may be easily implemented.

If the plan is not practicable, it will be impossible to implement it and such plans will prove to be just
the ‘Paper plan’ or ‘Casteless in the air’.

Thus, the organization should formulate such plans, which may be executed easily and praice also.

10. Futurity

Planning is always future-oriented.

Hence, while formulating plans, the forecast should be prepared for future actions and activities, on the
basis of data collected properly for various facts.

Besides, plans should also be formulated, by taking future requirements, goals, sources, market
conditions and competitive strategies, etc. into consideration.

11. Action Oriented

For successful planning, it should also have the quality of being action-oriented, because planning is
necessary for advancing towards activeness from passiveness.

Hence, each officer, employee, head of the department, and other related parties should have the
objective of inspiring the way of development. If it is not so, that ill effect will be that in place of
the solution of future problems, this will become all the more complicated.

12. Participation

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 Owner, management and subordinates, all should have the participation for good planning and they
should deliberate on important issues..

13. Reliability

Sufficient information, data, facts should be obtained at the proper time from reliable sources for good
and reliable planning.

14. Other Qualities or Elements

1. There should be coordination in short-term and long-term planning.

2. Economic social effects should also be kept in view.
3. Proper attention may be given to human aspects.
4. Plans should be logically sound.
5. Responsibilities should also be determined along with the powers delegated for plan execution.

Types of planning

1. Strategic
2. Operational
3. Tactical
4. Contingency

‍Strategic planning

Strategic planning is defining a company's direction and goals and allocating its resources to pursue
them. It consists of analyzing the competitive environment and identifying external and internal factors
that can affect the organization.

An example of strategic planning for a SaaS company that offers project management software and
wants to expand its customer base and increase revenue would look like this:

 Conduct market research to understand the needs and preferences of its target audience.
 Analyze the competitive landscape to identify potential opportunities and threats.

Based on this analysis, the company sets the following goals:

 Introduce new features and functionality to the software that addresses the specific needs and
pain points of the construction and engineering industries.

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  Develop targeted marketing campaigns to reach small and medium-sized businesses in these
industries through targeted online advertising, social media marketing, and content marketing.
 Increase customer retention by providing exceptional customer support and offering a loyalty
program for long-term subscribers.

To achieve these goals, the company allocates needed resources for marketing, development, and
customer support staff.

Operational planning

Operational planning is the process of defining specific actions and resources needed to achieve
the goals set out in the strategic plan.

It involves developing detailed plans and budgets to implement the strategies and tactics outlined in the
strategic plan and identifying and addressing any potential risks or challenges that may arise.

The example SaaS company has identified introducing new features and functionality to its software as
a key goal in its strategic plan. To achieve this goal, the company develops an operational plan that
outlines the specific actions and resources needed to execute this strategy.

The operational plan includes tasks such as:

 Implementing new features.

 Allocating development resources and setting goals and timelines for developing the new
features.
 Developing a budget for testing and quality assurance efforts.
 Assigning staff members to oversee the development and testing of the new features.

Tactical planning

Tactical planning develops plans and actions to achieve the goals set out in the operational plan.

It involves breaking down the larger goals and objectives into smaller, more manageable tasks that can
be completed within a shorter time frame, typically ranging from a few weeks to a few months.

Tactical planning includes developing content marketing campaigns, promoting new features,
assigning tasks to developers, etc.

Contingency planning

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Contingency planning is the process of identifying potential risks or challenges that may arise and
developing plans to mitigate or address them.

To ensure the success of the launch of the new features, our example SaaS company develops a
contingency plan to mitigate potential risks or challenges that may arise.

The contingency plan includes the following measures:

 Identifying potential disruptions to the development process, such as staff illness or unexpected
delays, and minimizing their impact on the timeline for launching the new software.
 Identifying potential IT issues, such as server outages or security breaches, and ensuring that
the software remains accessible to customers and secure.
 Sudden change in market conditions or a major competitor entering the market.

Advantages of Planning

1. Planning facilitates management by objectives.

a. Planning begins with determination of objectives.
b. It highlights the purposes for which various activities are to be undertaken.
c. In fact, it makes objectives more clear and specific.
d. Planning helps in focusing the attention of employees on the objectives or goals of
enterprise.
e. Without planning an organization has no guide.
f. Planning compels manager to prepare a Blue-print of the courses of action to be followed
for accomplishment of objectives.
g. Therefore, planning brings order and rationality into the organization.
2. Planning minimizes uncertainties.
a. Business is full of uncertainties.
b. There are risks of various types due to uncertainties.
c. Planning helps in reducing uncertainties of future as it involves anticipation of future
events.
d. Although future cannot be predicted with cent percent accuracy but planning helps
management to anticipate future and prepare for risks by necessary provisions to meet
unexpected turn of events.
e. Therefore with the help of planning, uncertainties can be forecasted which helps in
preparing standbys as a result, uncertainties are minimized to a great extent.
3. Planning facilitates co-ordination.
a. Planning revolves around organizational goals.
b. All activities are directed towards common goals.
c. There is an integrated effort throughout the enterprise in various departments and groups.
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 d. It avoids duplication of efforts. In other words, it leads to better co-ordination.
e. It helps in finding out problems of work performance and aims at rectifying the same.
4. Planning improves employee’s moral.
a. Planning creates an atmosphere of order and discipline in organization.
b. Employees know in advance what is expected of them and therefore conformity can be
achieved easily.
c. This encourages employees to show their best and also earn reward for the same.
d. Planning creates a healthy attitude towards work environment which helps in boosting
employees moral and efficiency.
5. Planning helps in achieving economies.
a. Effective planning secures economy since it leads to orderly allocation ofresources to
various operations.
b. It also facilitates optimum utilization of resources which brings economy in operations.
c. It also avoids wastage of resources by selecting most appropriate use that will contribute
to the objective of enterprise. For example, raw materials can be purchased in bulk and
transportation cost can be minimized. At the same time it ensures regular supply for the
production department, that is, overall efficiency.
6. Planning facilitates controlling.
a. Planning facilitates existence of certain planned goals and standard of performance.
b. It provides basis of controlling.
c. We cannot think of an effective system of controlling without existence of well thought
out plans.
d. Planning provides pre-determined goals against which actual performance is compared.
e. In fact, planning and controlling are the two sides of a same coin. If planning is root,
controlling is the fruit.
7. Planning provides competitive edge.
a. Planning provides competitive edge to the enterprise over the others which do not have
effective planning. This is because of the fact that planning may involve changing in work
methods, quality, quantity designs, extension of work, redefining of goals, etc.
b. With the help of forecasting not only the enterprise secures its future but at the same time
it is able to estimate the future motives of it’s competitor which helps in facing future
challenges.
c. Therefore, planning leads to best utilization of possible resources, improves quality of
production and thus the competitive strength of the enterprise is improved.
8. Planning encourages innovations.
a. In the process of planning, managers have the opportunities of suggesting ways and means
of improving performance.
b. Planning is basically a decision making function which involves creative thinking and
imagination that ultimately leads to innovation of methods and operations for growth and
prosperity of the enterprise.

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Disadvantages of Planning

Internal Limitations

There are several limitations of planning. Some of them are inherit in the process of planning like
rigidity and other arise due to shortcoming of the techniques of planning and in the planners
themselves.

1. Rigidity
a. Planning has tendency to make administration inflexible.
b. Planning implies prior determination of policies, procedures and programmes and a strict
adherence to them in all circumstances.
c. There is no scope for individual freedom.
d. The development of employees is highly doubted because of which management might
have faced lot of difficulties in future.
e. Planning therefore introduces inelasticity and discourages individual initiative and
experimentation.
2. Misdirected Planning
a. Planning may be used to serve individual interests rather than the interest of the enterprise.
b. Attempts can be made to influence setting of objectives, formulation of plans and
programmes to suit ones own requirement rather than that of whole organization.
c. Machinery of planning can never be freed of bias. Every planner has his own likes,
dislikes, preferences, attitudes and interests which is reflected in planning.
3. Time consuming
a. Planning is a time consuming process because it involves collection of information, it’s
analysis and interpretation thereof. This entire process takes a lot of time specially where
there are a number of alternatives available.
b. Therefore planning is not suitable during emergency or crisis when quick decisions are
required.
4. Probability in planning
a. Planning is based on forecasts which are mere estimates about future.
b. These estimates may prove to be inexact due to the uncertainty of future.
c. Any change in the anticipated situation may render plans ineffective.
d. Plans do not always reflect real situations inspite of the sophisticated techniques of
forecasting because future is unpredictable.
e. Thus, excessive reliance on plans may prove to be fatal.
5. False sense of security
a. Elaborate planning may create a false sense of security to the effect that everything is
taken for granted.
b. Managers assume that as long as they work as per plans, it is satisfactory.
c. Therefore they fail to take up timely actions and an opportunity is lost.
d. Employees are more concerned about fulfillment of plan performance rather than any kind
of change.
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 6. Expensive
a. Collection, analysis and evaluation of different information, facts and alternatives involves
a lot of expense in terms of time, effort and money
b. According to Koontz and O’Donell, ’ Expenses on planning should never exceed the
estimated benefits from planning. ’

External Limitations of Planning

1. Political Climate- Change of government from Congress to some other political party, etc.
2. Labour Union- Strikes, lockouts, agitations.
3. Technological changes- Modern techniques and equipments, computerization.
4. Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
5. Natural Calamities- Earthquakes and floods.
6. Changes in demand and prices- Change in fashion, change in tastes, change in income level,
demand falls, price falls, etc.

3.1.2 Organizing Function of Management

Organizing is the function of management which follows planning. It is a function in which the
synchronization and combination of human, physical and financial resources takes place. All the three
resources are important to get results. Therefore, organizational function helps in achievement of
results which in fact is important for the functioning of a concern. According to Chester Barnard,
“Organizing is a function by which the concern is able to define the role positions, the jobs related and
the co-ordination between authority and responsibility. Hence, a manager always has to organize in
order to get results.

A manager performs organizing function with the help of following steps:-

1. Identification of activities - All the activities which have to be performed in a concern have to be
identified first. For example, preparation of accounts, making sales, record keeping, quality
control, inventory control, etc. All these activities have to be grouped and classified into units.
2. Departmentally organizing the activities - In this step, the manager tries to combine and group
similar and related activities into units or departments. This organization of dividing the whole
concern into independent units and departments is called departmentation.
3. Classifying the authority - Once the departments are made, the manager likes to classify the
powers and its extent to the managers. This activity of giving a rank in order to the managerial
positions is called hierarchy. The top management is into formulation of policies, the middle level
management into departmental supervision and lower level management into supervision of
foremen. The clarification of authority help in bringing efficiency in the running of a concern.
This helps in achieving efficiency in the running of a concern. This helps in avoiding wastage of
time, money, effort, in avoidance of duplication or overlapping of efforts and this helps in
bringing smoothness in a concern’s working.

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 4. Co-ordination between authority and responsibility - Relationships are established among
various groups to enable smooth interaction toward the achievment of the organizational goal.
Each individual is made aware of his authority and he/she knows whom they have to take orders
from and to whom they are accountable and to whom they have to report. A clear organizational
structure is drawn and all the employees are made aware of it.

Importance of Organizing Function

1. Specialization - Organizational structure is a network of relationships in which the work is

divided into units and departments. This division of work is helping in bringing specialization in
various activities of concern.
2. Well defined jobs - Organizational structure helps in putting right men on right job which can be
done by selecting people for various departments according to their qualifications, skill and
experience. This is helping in defining the jobs properly which clarifies the role of every person.
3. Clarifies authority - Organizational structure helps in clarifying the role positions to every
manager (status quo). This can be done by clarifying the powers to every manager and the way he
has to exercise those powers should be clarified so that misuse of powers do not take place. Well
defined jobs and responsibilities attached helps in bringing efficiency into managers working.
This helps in increasing productivity.
4. Co-ordination - Organization is a means of creating co-ordination among different departments
of the enterprise. It creates clear cut relationships among positions and ensure mutual co-
operation among individuals. Harmony of work is brought by higher level managers exercising
their authority over interconnected activities of lower level manager.

Authority responsibility relationships can be fruitful only when there is a formal relationship
between the two. For smooth running of an organization, the co-ordination between authority-
responsibility is very important. There should be co-ordination between different relationships.
Clarity should be made for having an ultimate responsibility attached to every authority. There is
a saying, “Authority without responsibility leads to ineffective behaviour and responsibility
without authority makes person ineffective.” Therefore, co-ordination of authority- responsibility
is very important.

5. Effective administration - The organization structure is helpful in defining the jobs positions.
The roles to be performed by different managers are clarified. Specialization is achieved through
division of work. This all leads to efficient and effective administration.
6. Growth and diversification - A company’s growth is totally dependant on how efficiently and
smoothly a concern works. Efficiency can be brought about by clarifying the role positions to the
managers, co-ordination between authority and responsibility and concentrating on specialization.
In addition to this, a company can diversify if its potential grow. This is possible only when the
organization structure is well- defined. This is possible through a set of formal structure.
7. Sense of security - Organizational structure clarifies the job positions. The roles assigned to
every manager is clear. Co-ordination is possible. Therefore, clarity of powers helps

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 automatically in increasing mental satisfaction and thereby a sense of security in a concern. This
is very important for job- satisfaction.
8. Scope for new changes - Where the roles and activities to be performed are clear and every
person gets independence in his working, this provides enough space to a manager to develop his
talents and flourish his knowledge. A manager gets ready for taking independent decisions which
can be a road or path to adoption of new techniques of production. This scope for bringing new
changes into the running of an enterprise is possible only through a set of organizational structure.

Principles of Organizing

The organizing process can be done efficiently if the managers have certain guidelines so that they can
take decisions and can act. To organize in an effective manner, the following principles of organization
can be used by a manager.

1. Principle of Specialization

According to the principle, the whole work of a concern should be divided amongst the
subordinates on the basis of qualifications, abilities and skills. It is through division of work
specialization can be achieved which results in effective organization.

2. Principle of Functional Definition

According to this principle, all the functions in a concern should be completely and clearly
defined to the managers and subordinates. This can be done by clearly defining the duties,
responsibilities, authority and relationships of people towards each other.

Clarifications in authority-responsibility relationships helps in achieving co-ordination and

thereby organization can take place effectively.

For example, the primary functions of production, marketing and finance and the authority
responsibility relationships in these departments shouldbe clearly defined to every person
attached to that department. Clarification in the authority-responsibility relationship helps in
efficient organization.

3. Principles of Span of Control/Supervision

According to this principle, span of control is a span of supervision which depicts the number of
employees that can be handled and controlled effectively by a single manager.

According to this principle, a manager should be able to handle what number of employees under
him should be decided. This decision can be taken by choosing either froma wide or narrow span.
There are two types of span of control:-

a. Wide span of control- It is one in which a manager can supervise and control effectively
a large group of persons at one time. The features of this span are:-
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 i. Less overhead cost of supervision
ii. Prompt response from the employees
iii. Better communication
iv. Better supervision
v. Better co-ordination
vi. Suitable for repetitive jobs

According to this span, one manager can effectively and efficiently handle a large number
of subordinates at one time.

b. Narrow span of control- According to this span, the work and authority is divided
amongst many subordinates and a manager doesn't supervises and control a very big group
of people under him.

The manager according to a narrow span supervises a selected number of employees at

one time. The features are:-

i. Work which requires tight control and supervision, for example, handicrafts, ivory
work, etc. which requires craftsmanship, there narrow span is more helpful.
ii. Co-ordination is difficult to be achieved.
iii. Communication gaps can come.
iv. Messages can be distorted.
v. Specialization work can be achieved.

Factors influencing Span of Control

3. Managerial abilities- In the concerns where managers are capable, qualified and
experienced, wide span of control is always helpful.
4. Competence of subordinates- Where the subordinates are capable and competent and
their understanding levels are proper, the subordinates tend to very frequently visit the
superiors for solving their problems. In such cases, the manager can handle large number
of employees. Hence wide span is suitable.
5. Nature of work- If the work is of repetitive nature, wide span of supervision is more
helpful. On the other hand, if work requires mental skill or craftsmanship, tight control
and supervision is required in which narrow span is more helpful.
6. Delegation of authority- When the work is delegated to lower levels in an efficient and
proper way, confusions are less and congeniality of the environment can be maintained. In
such cases, wide span of control is suitable and the supervisors can manage and control
large number of sub- ordinates at one time.
7. Degree of decentralization- Decentralization is done in order to achieve specialization in
which authority is shared by many people and managers at different levels. In such cases,
a tall structure is helpful.

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 There are certain concerns where decentralization is done in very effective way which
results in direct and personal communication between superiors and sub- ordinates and
there the superiors can manage large number of subordinates very easily. In such cases,
wide span again helps.

4. Principle of Scalar Chain

Scalar chain is a chain of command or authority which flows from top to bottom. With a chain of
authority available, wastages of resources are minimized, communication is affected, overlapping
of work is avoided and easy organization takes place.

A scalar chain of command facilitates work flow in an organization which helps in achievement
of effective results. As the authority flows from top to bottom, it clarifies the authority positions
to managers at all level and that facilitates effective organization.

5. Principle of Unity of Command

It implies one subordinate-one superior relationship. Every subordinate is answerable and

accountable to one boss at one time. This helps in avoiding communication gaps and feedback
and response is prompt.

Unity of command also helps in effective combination of resources, that is, physical, financial
resources which helps in easy co-ordination and, therefore, effective organization.

Authority Flows from Top to Bottom

Managing Director

Marketing Manager

Sales/ Media Manager

Salesmen

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 According to the above diagram, the Managing Director has got the highest level of authority.
This authority is shared by the Marketing Manager who shares his authority with the Sales
Manager.

From this chain of hierarchy, the official chain of communication becomes clear which is helpful
in achievement of results and which provides stability to a concern.

This scalar chain of command always flow from top to bottom and it defines the authority
positions of different managers at different levels.

Classification of Organizations

Organizations are basically clasified on the basis of relationships. There are two types of organizations
formed on the basis of relationships in an organization

1. Formal Organization - This is one which refers to a structure of well defined jobs each bearing a
measure of authority and responsibility. It is a conscious determination by which people
accomplish goals by adhering to the norms laid down by the structure. This kind of organization
is an arbitrary set up in which each person is responsible for his performance. Formal
organization has a formal set up to achieve pre- determined goals.
2. Informal Organization - It refers to a network of personal and social relationships which
spontaneously originates within the formal set up. Informal organizations develop relationships
which are built on likes, dislikes, feelings and emotions. Therefore, the network of social groups
based on friendships can be called as informal organizations. There is no conscious effort made to
have informal organization. It emerges from the formal organization and it is not based on any
rules and regulations as in case of formal organization.

Relationship between Formal and Informal Organizations

For a concerns working both formal and informal organization are important. Formal organization
originates from the set organizational structure and informal organization originates from formal
organization. For an efficient organization, both formal and informal organizations are required. They
are the two phase of a same concern.

Formal organization can work independently. But informal organization depends totally upon the
formal organization.

Formal and informal organization helps in bringing efficient working organization and smoothness in a
concern. Within the formal organization, the members undertake the assigned duties in co-operation
with each other. They interact and communicate amongst themselves. Therefore, both formal and
informal organizations are important. When several people work together for achievement of
organizational goals, social tie ups tends to built and therefore informal organization helps to secure
co-operation by which goals can be achieved smooth. Therefore, we can say that informal organization
emerges from formal organization.
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Line Organization

Line organization is the most oldest and simplest method of administrative organization.

According to this type of organization, the authority flows from top to bottom in a concern. The line of
command is carried out from top to bottom. This is the reason for calling this organization as scalar
organization which means scalar chain of command is a part and parcel of this type of administrative
organization.

In this type of organization, the line of command flows on an even basis without any gaps in
communication and co-ordination taking place.

Features of Line Organization

1. It is the most simplest form of organization.

2. Line of authority flows from top to bottom.
3. Specialized and supportive services do not take place in these organization.
4. Unified control by the line officers can be maintained since they can independently take decisions
in their areas and spheres.
5. This kind of organization always helps in bringing efficiency in communication and bringing
stability to a concern.

Merits of Line Organization

1. Simplest- It is the most simple and oldest method of administration.

2. Unity of Command- In these organizations, superior-subordinate relationship is maintained and
scalar chain of command flows from top to bottom.
3. Better discipline- The control is unified and concentrates on one person and therefore, he can
independently make decisions of his own. Unified control ensures better discipline.
4. Fixed responsibility- In this type of organization, every line executive has got fixed authority,
power and fixed responsibility attached to every authority.
5. Flexibility- There is a co-ordination between the top most authority and bottom line authority.
Since the authority relationships are clear, line officials are independent and can flexibly take the
decision. This flexibility gives satisfaction of line executives.
6. Prompt decision- Due to the factors of fixed responsibility and unity of command, the officials
can take prompt decision.

Demerits of Line Organization

1. Over reliance- The line executive’s decisions are implemented to the bottom. This results in
over-relying on the line officials.
2. Lack of specialization- A line organization flows in a scalar chain from top to bottom and there
is no scope for specialized functions. For example, expert advices whatever decisions are taken by
line managers are implemented in the same way.
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 3. Inadequate communication- The policies and strategies which are framed by the top authority
are carried out in the same way. This leaves no scope for communication from the other end. The
complaints and suggestions of lower authority are not communicated back to the top authority. So
there is one way communication.
4. Lack of Co-ordination- Whatever decisions are taken by the line officials, in certain situations
wrong decisions, are carried down and implemented in the same way. Therefore, the degree of
effective co-ordination is less.
5. Authority leadership- The line officials have tendency to misuse their authority positions. This
leads to autocratic leadership and monopoly in the concern.

Organizational structure
A functional organisational structure is a corporate structure that organises individuals according to
their expertise, skill, or related roles. It is organised into layers of hierarchy that encompass several
departments and are led by authorised leaders. Businesses typically utilise functional structures
because it groups individuals with a comparable knowledge and, when used in a team setting, helps
organisations achieve their goals.

It is a sort of organizational structure in which the organization is divided into smaller units based on
specific functional areas such as information technology, finance, human resources, or marketing.

Because individuals with similar abilities and expertise are placed together by function, functional
departmentalization may allow for higher operational efficiency. One problem with this arrangement is
that the many functional groups may not interact, thereby reducing flexibility and creativity. A new
trend aimed at overcoming this disadvantage is the formation of cross-functional teams.

Some people refer to these functional regions as "silos". Similarly, the company's senior management
team is often composed of numerous functional heads (such as the chief financial officer and the chief
operating officer). Communication takes place inside each functional department and is relayed across
departments by the department leaders.

Organizations with extensive operations tend to utilize functional organizational structures. The
functional organizational structure connects individuals with comparable and
complementary knowledge and abilities. It also helps employees achieve their goals and work together
more cohesively.

Typically, functional organizations are divided into expert skill areas like product development, sales,
marketing, etc. They can also be divided into categories based on distinct goods, services, and
locations, as Amazon and Disney have done. These parts are known as "silos" because they operate
independently and have their management structures.

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 Understanding this structure can significantly help with organizational behaviour as it highlights the
critical focus areas, demonstrates how different sections interact and contributes to the company's
overall functioning.
Features of Functional Organization
1. The organizations entire work is separated into several functions.
2. An expert performs each function.
3. The functional head controls his functions actions throughout the organization.
4. Functional heads have a great deal of autonomy.

Benefits of a Functional Structure

There are many advantages of functional organizational structures, and these are explored below:

Better efficiency
Because individuals with common abilities and expertise are grouped by duties performed, functional
departments may increase operational efficiency. As a result, each group of specialists may work
autonomously, with management serving as the point of contact between functional areas. This
configuration allows for more specialization.

Specialization
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The most apparent benefit of a functional organization is that grouping people by specialty assures
consistent departmental expertise. This is especially true in large businesses with many functional
levels within a department — for example, a specific tech group that follows up on tech issues not
handled by the primary telephone tech support group.

Speed of Operation
Another advantage of this type of organizational specialization is operational speed. In general, a
senior tech will resolve a support issue faster than someone with less expertise. They're also likely
to train new employees more quickly.

Clarity in Operations
Segregating the workforce based on function clarifies organizational accountability and job
distribution. This reduces assignment duplication, which wastes time and effort, and makes it simpler
for management to send work to appropriate staff.

Workload production
It lightens the load on the senior executives. In the company, there is focused supervision, and each
function in charge is only responsible for its functional area.

Professional Development for Executives

A functional manager must be an expert in only one function. Better executive development is
facilitated as a result of this.

Expansions Scope
It provides more room for growth than a line organization. It does not have the problem of a few line
managers having limited competencies.

Better Control
The functional managers specialized knowledge enables improved control and oversight in the
enterprise.

Factors Affecting Organization Structure

Organization structure is designed keeping in view the following factors:

1. Strategy:

Strategy determines a course of action to direct various organizational activities. It makes plans to co-
ordinate human and physical resources to work towards a common objective. Strategy is pre-requisite
to organization structure and also follows it. The relationship between strategy and organization
structure is depicted as follows:

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Strategies to diversify product lines or markets require decentralized transition as decision-making is
done at wider level and strategies for organizations working in stable environment. Where managers
do not diversify their operations, require a centralized organization.

2. Technology :

The technology for manufacturing goods and services also affects the organization stricture.

In case of mass production technology, mechanistic organization structure is more appropriate, while
in case of continuous production or small scale production technology, the appropriate from is organic
structure. This is because mass production technologies involve standardization and specialization of
work activities and continuous or unit production technologies require low levels of standardization
and specialization.

3. People:

Organization structure defines work, groups it into departments and appoints people to run those
departments. People at different jobs must possess the skill, knowledge and efficiency to accomplish
the related tasks.

4. Tasks :

Activities performed by people who transform organizational plans into reality are known as tasks.
Various task characteristics are:

(a) Skill variety:

It is the extent to which creativity and variety of skills and talents are required to do a task.

People with high degree of task varieties (for example, a dress designer ) perform tasks that increase

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their intellectual ability and give them high job satisfaction.

(b) Task identity:

Whether to produce a product in whole or in parts determines its task identity. When a product is
produced as a whole, it has greater task identity.

People performing tasks with high task identity y (for example, a computer programmer) perform
various job functions related to that task from beginning to the end, derive job satisfaction out of their
work and feel motivated to repeat those tasks.

(c) Task significance:

The importance of task affecting the well-being or lives of people working inside and outside the
organization determines significance of the task.

People performing tasks with high task significance, i.e., tasks which positively affect the well-being
and safety of others (for example, a traffic police inspector), feel satisfied with their job performance
and perform work of high quality and esteem.

(d) Autonomy:Whether or not an individual plans the task on his own determines autonomy of
the task.It determines the extent to which a person enjoys t freedom of performing various
Job activities and determines the steps or procedures to carry them out. People who are responsible for
all the functions and schedules related to a job (for example, a project manager) hold accountability for
that job and enjoy greater autonomy with respect to that task and derive greater job satisfaction.

(e) Feedback:

It is the information that people receive about successful completion of their task.
Decisions:
Questions like who makes decisions-top managers or lower level managers, how information flows in
the organization so that decision-making is facilitated, affect the organization structure.

Centralized decision-making powers give rise to mechanistic structures and decentralized decision-
making processed give rise to organic or behavioral structures.

6. Informal organization:

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Informal organizations are and outgrowth of formal organizations. Social and cultural values, religious
beliefs and personal likes and dislikes of members which form informal groups cannot be overlooked
by management.

7. Size:

A group known as Aston Group conducted research on firms of different sizes and concluded that as
firms increase in size, the need for job specialization, standardization and decentralization also
increases and organizations are structured accordingly.

8. Environment:

Organization structure cannot ignore the effects of environment. Organizations must adapt to the
environment, respond to incremental opportunities and satisfy various external parties such as
customers, suppliers, layout unions etc.

In case of stable environment where people perform routine and specialized jobs, which do not change
frequently, a closed or mechanistic organization structure is appropriate.

9. Managerial perceptions:

Organizations where top managers perceive their subordinated as active, dynamic and talented
entrepreneurs, prefer organic form of structure, If they hold negative opinion about their subordinates,
they prefer mechanistic organization structure.

For more help in Factors Affecting Organization Structure click the button below to submit your
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Disadvantages of Functional Organizational Structures

Segregation
Teams become siloed when departments are inhabited by people who specialize in certain job areas.
Employees in separate teams do not have the chance to interact and share opinions, which can be
detrimental to the business' long-term success.

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Weakening of Common Bonds
A shared organizational purpose boosts employee morale and performance and is a key predictor of
organizational success. When each group of experts in a functional organization is largely isolated, the
common link that highlights a single overall organizational objective is nearly always weaker than in
an organization where diverse personnel work closely regularly.

Lack of Coordination
In an ideal functional organization, each functional groups activities would require no input from other
functional groups; nevertheless, this is not often the case. As communication becomes more prevalent
in businesses, isolated groups may underperform or even fail because they lack an institutionally
recognized method of expressing requirements and difficulties to other functional groups that may
have assisted.

Managers from other functional groups may not reply constructively or promptly in some cases
because "its not our problem." The period when collaboration would have been most successful may
have gone by the time the necessity for cooperation has been identified.

Territorial Conflicts
Another downside of a functional organization is the likelihood of territorial conflicts, which is
strongly tied to the failure of functional groups to cooperate. These arguments might be over
objectives, budgetary competitiveness, or any number of other difficulties that arise from a clash of
egos that occurs when each department has its separate functional organization or when there is a lack
of a strong sense of a single purpose.

Complexity
Because of its varied intricacies, the functioning of the functional organizational structure is
complicated to understand. Workers are taken aback by a slew of directives from various functional
heads.

Perspective Is Limited
A functional manager tends to set boundaries around himself and focuses primarily on their department
rather than the entire organization.

Decision-Making Delay
There is a widespread lack of coordination among the functional executives, which causes decision-
making to be delayed.

Companies should make decisions based on what is most urgently needed. Working with other areas
may result in unhealthy rivalry for the functional organization. There may be a misunderstanding about
how important some specifics are to the organization. In one case, the marketing department may make
a request that is not prioritized to address the worries of the sales department by hiring additional
workers.
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An organization's organizational structure integrates and connects its many components to work at its
best. The chosen structure impacts an organizations ability to achieve its strategy and objectives. To
aid in achieving strategic alignment, leadership should be aware of various organizational structures
characteristics, benefits, and limits. I hope this article has shown you everything you need to know
about functional organizational structures.

What Is Delegation of Authority?

Delegation of authority is transferring the responsibility of a task to another individual. As a
manager when you delegate authority you also share authority with your subordinates and
hold them accountable for their actions. When you delegate authority, you are basically
entrusting others with parts of your job and making them responsible to accomplish them.

There are three elements to a delegation of authority:

Authority
Authority is the power a manager has to delegate tasks, allocate resources efficiently, make
decisions, and have the right to give orders to others in order to meet company goals. It
flows from top to bottom and managers have it more.

Responsibility
Responsibility is the duty of an individual to complete the tasks given to them. It should be
given with adequate authority or it will lead to dissatisfaction and frustration. It goes from
bottom to top with middle and lower-level management having more.

Accountability
This is the process of providing explanations for not achieving the desired outcomes. Unlike
responsibility and authority, accountability cannot be delegated. In fact, it comes hand in
hand with responsibility. An employee responsible for a certain task automatically becomes
accountable for the results.

Let’s now look at some of the features of delegation of authority.

Features of Delegation of Authority

There are six features of delegation of authority:

1. Delegation of authority is about giving power to a subordinate to act independently but

within the parameters set by the manager.
2. When delegating authority, a manager shares some authority with the subordinates. It
doesn’t mean that they have completely given up their authority. The authority is shared
so that the subordinates can fulfill their responsibility with due diligence.
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3. Authority once delegated can either be contracted or expanded depending upon the
manager and scope of the work.
4. A manager can only delegate authority that they possess. And as mentioned in the second
point, authority is not shared completely.
5. It can be delegated in either written or verbal form.
6. The delegation of authority must comply with all company policies, rules, and
regulations.
Ways to Delegate Authority
There are several ways of delegating authority to your employees:

Departments
One way of delegating authority is by delegating the supervision of a department. For
instance, as a CEO, you can delegate the authority of the entire marketing department to the
marketing manager.

Projects
You can assign authority to a team for a certain project. For instance, a marketing director
can assign an advertising campaign project to a project manager. The project manager can
then take copywriters and designers on board and assign tasks accordingly.

Decision Making
Another way of delegating authority is to allow employees to make certain decisions so that
you may focus on other tasks. For example as an HR manager, you can delegate the
authority of hiring employees to a senior HR associate.

Analysis
If you’re working on a certain project, you can authorize employees to conduct detailed
research on the project. For instance, you can ask your department’s analyst to research
demographic statistics for the upcoming advertising project’s audience.

Administrative Processes
You can also assign administrative tasks to other employees. For instance, as a marketing
manager, you can assign the duty of scheduling meetings and follow up on emails to a
marketing assistant.

How to Delegate Authority

In order to successfully delegate tasks, you have to set the right expectations, monitor
progress, and evaluate results. Below are a few steps for effective delegation of authority:

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Assign Tasks
Assign tasks as per the experience of an employee. Define the scope of the task and match it
with the experience and expertise of the employees.

Set Expectations
As soon as you assign the tasks, set clear expectations and mention the deadlines. Setting
expectations right at the beginning provides the guidance that will help them meet the goals
efficiently.

Monitor Progress
It is a good practice to request updates from employees regularly or bi-weekly. This will
keep you informed on their progress and will also highlight the problems and obstacles that
may arise. You will be able to extend help and provide guidance along the way which will
ensure timely completion of the project or task at hand.

Practice Accountability
Constant evaluation of your team’s work is important to ensure that work is done
completely. For a temporary delegation of authority, a one-time evaluation may work. But
for a permanent delegation of authority, you need to keep analyzing and evaluating work on
an ongoing basis.

The Importance of Delegation

There are several benefits of delegation of authority:

 Delegation improves task efficiency and an organization’s overall income.

 It empowers employees within the organization boosting their confidence.
 By delegating authority, you empower your team and builds trust.
 Delegation is a way of developing employees as it motivates them to be responsible and
accountable for their work.
 As a leader, you will learn to observe and analyze your employees better. Based on your
skills, you will be able to delegate tasks to others in a better way.
 As a manager, when you delegate tasks you are basically reducing your workload to
focus on tasks that require your expertise.
 Delegation of authority motivates and inspires employees to demonstrate honesty and
commitment to their work, managers, and organization.
Why Do Some Managers Fear Delegating?
A good manager believes in developing their employees’ strengthens and career aspirations
and tries to find relevant tasks to delegate them. As mentioned above, delegating tasks
lightens a manager’s burden and builds an employee’s skill set. However, some managers
either fear or do not prefer to delegate tasks. Let’s have a look at some of the reasons:

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Fear of Being Outperformed
Sometimes managers feel threatened by their subordinates. They fear that their subordinates
might complete the task faster and in a better way. This fear stems from their own insecurity
and doubts regarding their capabilities. Managers do not want others in the company to
notice this or sing praises of their subordinates. Consequently, they prefer to not delegate
tasks at all.

Lack of Trust
At times, managers don’t trust their employees completely. They feel that their subordinates
will not turn in the assignment on time or make blunders. As a result, they find it easier to
do the task themselves rather than take the blame for others later on.

Shortage of Time
Sometimes, it’s neither the threat nor the lack of trust that stops a manager from delegating.
It is their own mismanagement of time that prevents them. Managers feel so overwhelmed
because of their workload that they find it easier to do the task themselves. They feel that
explaining the task and responsibilities to someone else is time-consuming.

Need for Control

Some managers prefer maintaining control over others. such managers want a task to be
done in a specific way. They feel that in order to maintain their control over their
subordinates, they have to keep the ropes in their own hands. These managers fear that
delegation of authority might lead to power and control slipping from their hands.

Difference Between Authority and Responsibility

Employees often confuse authority with responsibility. We have gathered the differences
between the two in the table below:

Authority Responsibility

A right to command to others or The obligation of a subordinate to

subordinates complete the task assigned to them

Responsibility is the result of the

Authority stems from the position of a relationship between a superior and
person subordinate

It is mobile. It can be transferred from Responsibility is static and cannot be

one person to another. transferred

Flow from top to bottom Flows from bottom to top

Difference Between a Delegation of Authority and Decentralization
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By now you must be clear that one person cannot perform all duties and responsibilities and
that is where the concept of delegation came in. But let’s not overlook the concept of
decentralization too. Let’s learn some of the key differences between the two.

But first, what is decentralization?

Decentralization is the systematic distribution of power throughout the corporate ladder. It is

when the top management disperses the power to the lower-level management.

Delegation and decentralization are often used interchangeably but are not the same. The
table below will give you more clarity:

BASIS FOR
COMPARISON DELEGATION DECENTRALIZATION

Management
What is it? Technique Explanation of management

Superiors are Department heads are accountable

accountable for for the actions of concerned
Accountability subordinates’ actions departments

Important for all Not necessary for all organizations

Requirement organizations to adopt this

Subordinates are not A reasonable amount of freedom

Liberty of Work given full liberty exists

The superior or
manager has the The top management has the
Control ultimate authority complete control

Creates superior-
subordinate
Relationship relationship Creates semi-autonomous units
Principles for Delegation of Authority
In order to successfully delegate authority, a manager should follow the principles below:

 Define the duty with clarity

 Command the subordinate yourself and not let another subordinate do it
 Define the authority and responsibility clearly to a subordinate before assigning a task

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 As a manager delegation of authority doesn’t rid you of the primary responsibility.
Therefore, keep supervising and provide guidance to your subordinates.
 Have clear communication with the subordinates before delegating them any task
 Assign only those tasks that a subordinate can perform. Keep an out for their skillset and
expertise.
 Assign limited authority to your subordinates. Giving them complete authority will only
pave way for trouble.

Delegation of Authority: Preparation Checklist

1. Keep a positive delegation attitude. Analyze and question every task you have been
doing for years. Question yourself frequently, “Who else can do this?”
2. Be result-oriented. Delegate tasks with the intention of accomplishing the desired
outcome and not just brush off the extra load off your shoulders.
3. Be careful in selecting the person to whom you’ll be delegating a certain task. Have
more than one criteria when choosing such as the required skill set, experience, extra
bandwidth, ability to multitask, and so on and so forth.
4. Consult others before delegating a certain task. Take input from others about what to
change, when to assign the task, etc.
5. When assigning a task, define the deadline and set a schedule of when you’ll be
reviewing the progress.
6. Train your subordinates and provide them the necessary guidance along the way. Also,
give them some room to think creatively and independently. Too much control can be
overkill.
7. Clarify the authority level such as how much power will they require, type of power, etc.
8. Keep monitoring progress. don’t forget that as a manager, you will still be responsible
for the success and failure of the assigned task. Therefore, maintain control of the
situation.
9. Give feedback. Apart from highlighting the areas of improvement, appreciate them for
the progress they have made along with positive reinforcement and coaching.
10. Keep track of the lessons learned. Lessons learned by the employees and you. it is
important to document these lessons so that you can change and improve as and when
needed.
11. Evaluate overall performance at the end of the task. Let your subordinates know where
they did well and what needs to be improved. Evaluate yourself based on how accurate
you were in delegating the task to the right person.
Delegation of Authority Is the Roadmap to Success
Hopefully, by now you are clear about the importance of the delegation of authority and the
role it plays in developing an organization and its employees.

We recommend that you implement the steps and principles highlighted in this article when
delegating a task to your team.
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 An important to keep in mind is that delegation will ease your workload. But at the end of
the day, you will be responsible for the success and failure of the assigned task.

So, choose wisely among your subordinates.

3.1.3 Controlling as a Function of Management

Definition

According to Brech, Controlling is a systematic exercise which is called as a process of checking

actual performance against the standards or plans with a view to ensure adequate progress and also
recording such experience as is gained as a contribution to possible future needs.

Characteristics

 Controlling is an end function – It is a function, which comes once the performances are made in
conformity with plans.
 Controlling is a pervasive function – It is a pervasive function because it is performed by managers at
all levels and in all type of concerns.
 Controlling is backward as well as forward looking – Effective control is not possible without past
being controlled. Controlling always look to future so that follow-up can be made, whenever required.
 Controlling is a dynamic process – Controlling requires taking revival methods, changes have to be
made wherever possible. Focus has to be on controlling all the time, which makes it a dynamic function.
 Controlling is related with Planning – Planning and Controlling are two inseparable functions of
management. Without planning, controlling is a meaningless exercise and without controlling, planning
is useless. Planning presupposes controlling and controlling succeeds planning.

3. Objectives

 To identify the actual progress of the work in the company.

 To facilitate R&D department to improve efficiency.
 To facilitate coordination in the organization.
 To measure the actual performance with the set standard.
 To calculate the actual quantity and quality of the product.
 To eliminate wastage of resources.
 To meet the deadline of the projects.

4. Advantages of Controlling

 It helps plans to be implemented effectively.

 Controlling facilitates coordination in organizational functioning, by reducing diversity.
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 It encourages high morale on the part of employees.
 It ensures order, discipline and obedience on the part of subordinates.
 Controlling helps the organization to preserve and promote its distinct identity against environmental
changes.
 It makes effective use of physical and human resources, for achieving organizational goals.
 It enables organization to keep watch on external environmental for better control over it.
 Control promotes integration between Short Term Goals and Long-term Objectives Corporate Goals and
Departmental Goals.
 It saves time and energy and helps in timely corrective action by the manager.
 Control allows managers to concentrate on important tasks.
 It also allows better utilization of the managerial resource.

5. Limitations

 There is difficulty in setting qualitative standards.

 There is no Control over External Factors.
 There is resistance to change from Employees.
 It is a costly affair, especially for small companies.

6. Steps in Controlling Function

Steps in Controlling Function include establishing standards, measuring performance, comparing

actual performance with standard performance and finally taking remedial measures.

Figure : Steps in Controlling Function

1. Establishment of Standards – Standards are the targets required to be achieved. Controlling

becomes easy through establishment of these standards because controlling is exercised on the basis of
these standards. They are the criterions for judging the performance. Standards generally are classified
as

 Measurable or Tangible Standards- Those standards which can be measured and expressed are called
as measurable standards, such as cost, output, expenditure, time, profit, etc.

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 Non-Measurable or Intangible Standards –These cannot be measured monetarily, such as performance
of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible
standards.

2. Measurement of Performance – Deviations are found out by comparing standard performance

with the actual performance. Performance levels are sometimes easy to measure and sometimes
difficult. Measurement of tangible standards is easy as it can be expressed in units, cost, money terms,
etc. Performance of a manager cannot be measured in quantities. It is also sometimes done through
various reports like weekly, monthly, quarterly, yearly reports. It can be measured only by their-

Response towards Communication with the

Attitude Morale to work
physical environment superiors.

3. Comparison of Actual with Standard Performance –By comparing the actual with standard,
deviations are identified. Manager has to find out whether the deviation is positive or negative or
whether the actual performance is in conformity with the planned performance. The managers have to
exercise control by exception.

4. Taking Remedial Actions – Once the causes and extent of deviations are known, the manager has
to detect those errors and take remedial measures for it. There are two alternatives as follows:

Taking corrective measures for deviations In the end, if the actual performance is not in
which have occurred conformity with plans, the targets are revised.

7. Types of Control

Figure : Types of Control

1. Post-Action-Control/Feedback Control – This process involves collecting information about a

finished task, assessing that information and improvising the same type of tasks in the future. The
results of the completed activity are compared with pre-determined standards and if there are any
deviations, corrective action can be taken for future activities. For example, a restaurant manager may
ask the customer about the quality and taste of food ordered by him/her and take suggestions to
improve the meals.

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2. Concurrent Control – It is also called real-time control. It checks any problem and examines it to
take action, before any loss is incurred.

3. Steering Control – The key feature of this control is the capability to take corrective action, when
the deviation has already taken place, but the task has not been completed. The big advantage of
steering control is that corrective actions can be taken early.

4. Yes/No Control – This control is designed to check at each check point, whether the allow activity
to proceed further or not. These controls are necessary and useful where a product passes sequentially
from one point to another, with improvements added at each step along the way. These controls stop
errors from being compounded. Safety checks and legal approvals of contracts, prior to approval are
examples of yes/no controls.

5. Predictive/ Feed Forward Control – This type of control helps to foresee problem ahead of
occurrence. Therefore, action can be taken before such a circumstance arises.

In an ever-changing and complex environment, controlling forms an integral part of the

organization.

8. Techniques of Controlling

Techniques of control are being used by managers since long and there are two categories of
controlling namely the traditional techniques and the modern techniques.

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 Figure: Techniques of Controlling

Traditional Techniques

 Personal Observation
 Budgeting
 Break-Even Analysis
 Financial Statements
 Statistical Control
 Self Control

Modern Techniques

 Management Information System (MIS)

 Management Audit
 Responsibility Accounting
 Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM)
 Balanced Card
 Ratio Analysis
 Economic Value Added (EVA)

How Controlling Function Helps Managers

 Managers at all levels of management Top, Middle & Lower – need to perform controlling
function to keep control over activities in their areas. Therefore, controlling is very much
important in an educational institution, military, hospital, & a club as in any business organization.
 Therefore, controlling function should not be misunderstood as the last function of management. It
is a function that brings back the management cycle back to the planning function. Thus, the
controlling function act as a tool that helps in finding out that how actual performance deviates
from standards and also finds the cause of deviations & attempts which are necessary to take
corrective actions based upon the same.
 This process helps in the formulation of future plans in light of the problems that were identified
&, thus, helps in better planning in the future periods. So from the meaning of controlling we
understand it not only completes the management process but also improves planning in the next
cycle.

Importance of Controlling to an organization

After the meaning of control, let us see its importance. Control is an indispensable function of
management without which the controlling function in an organization cannot be accomplished and
the best of plans which can be executed can go away. A good control system helps an organization in
the following ways:

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 1. Accomplishing Organizational Goals

The controlling function is an accomplishment of measures that further makes progress towards the
organizational goals & brings to light the deviations, & indicates corrective action. Therefore it helps
in guiding the organizational goals which can be achieved by performing a controlling function.

2. Judging Accuracy of Standards

A good control system enables management to verify whether the standards set are accurate &
objective. The efficient control system also helps in keeping careful and progress check on the
changes which help in taking the major place in the organization & in the environment and also helps
to review & revise the standards in light of such changes.

3. Making Efficient use of Resources

Another important function of controlling is that in this, each activity is performed in such manner so
an in accordance with predetermined standards & norms so as to ensure that the resources are used in
the most effective & efficient manner for the further availability of resources.

4. Improving Employee Motivation

Another important function is that controlling help in accommodating a good control system which
ensures that each employee knows well in advance what they expect & what are the standards of
performance on the basis of which they will be appraised. Therefore it helps in motivating and
increasing their potential so to make them & helps them to give better performance.

5. Ensuring Order & Discipline

Controlling creates an atmosphere of order & discipline in the organization which helps to
minimize dishonest behavior on the part of the employees. It keeps a close check on the activities
of employees and the company can be able to track and find out the dishonest employees by
using computer monitoring as a part of their control system.

6. Facilitating Coordination in Action

The last important function of controlling is that each department & employee is governed by such
pre-determined standards and goals which are well versed and coordinated with one another. This
ensures that overall organizational objectives are accomplished in an overall manner.

3.1.4 Leading as a function of Management

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What is Leadership?

According to John Maxwell, 'Leadership is influence - nothing more, nothing less.'

Warren Bennis called it the capacity to translate vision into reality.

If you google the term 'Leadership,' you will find endless leadership definitions by the great minds
and leaders. After working with some good leaders and being in a leadership position myself, the
understanding I have developed is that leadership can influence the crowd to believe, act, and work
with perseverance to meet the greater good.

Being a good leader is not a cakewalk. One must possess effective leadership qualities that help them
achieve higher goals and objectives. Be it resistance and persistence of Mahatma Gandhi or the vision
of Elon Musk.

Essential leadership qualities that help leaders to achieve greater success

1. Integrity

Integrity is a core quality that every leader must possess. You cannot run any business successfully if
you lack integrity. Self-development author Brian Tracy says that whenever he holds a
strategic business meeting, the first value every executive agrees on is integrity.

Business leaders know- Integrity is the foundation of good leadership, and one must stand for their
beliefs. No matter how hard a situation, a good leader inspires with his principles without
compromising; they refrain from making false promises or take shortcuts, choosing thoughts and
action over personal gain. Delivering the said promises as ethically and morally grounded is necessary
to pay the dividend in the long run.

2. Innovative

An innovative leader is not a creative genius with thought-provoking ideas but gives others the
freedom to develop their ideas. You would always find people with great ideas who lack the will,
determination, and fear of taking any actions. But innovative leaders are not one of them.

Innovative people are always open to new ideas and discussions. They listen to everyone actively and
also motivate others to think out of the box. This quality gives them an edge over others since they are
always hunting for creativity and innovations. As the innovative leader, Steve Jobs himself said,
'Innovations distinguish between a leader and a follower.'

3. Honesty

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One of the essential leadership qualities is the possession of honesty. Honesty is expected from leaders
to garner trust and respect from people for reliability. Moreover, we look upto people who are loyal to
their words and are accountable. Thus, honesty is the most valued trait for any business leader or any
leader in general.

Leadership can be defined in one word 'Honesty'. You must be honest with the players and
honest with yourself. ~Earl Weaver

4. Active Listening

The roots of effective leadership lie in simple things, one of which is listening. Listening to
someone demonstrates respect; it shows that you value their ideas and are willing to hear them.
~John Baldoni

Active listening is an excellent quality to have when it comes to leadership. Good leaders listen to
people with great attention and sincerity. It helps them understand people and their perspectives.
Active listening builds trust and relationships in the long run. Good leaders communicate with care,
focus on the person and the message; they don't interrupt and acknowledge what is being said. And that
is what the world needs; leaders who listen to its people. Acquiring this skill is not easy; it needs self-
awareness and humility to respect others’ thoughts.

5. Self-Confidence

Self-confidence is found abundantly amidst true leaders; hence they know about their competencies
and leadership qualities. They are sure about their competencies and leadership skills. They have a
sense of self-assurance and self-esteem and, most importantly, believe that they can make a difference.
As Rosalynn Carter rightly said, ‘You have to have confidence in your ability and be tough enough to
follow through.’

Self-confidence is critical for leadership because it gives them wings to take risks, accomplish goals,
and fly high. Organizational leaders take charge themselves and march with positivity and
confidence. It allows them to make immediate decisions, solve organizational problems and conflicts.
Good leaders take full responsibility and quick actions without passing on issues, ignoring, or
procrastinating.

6. Visionary

A leader should be Visionary and have more foresight than an employee. ~Jack Ma

A visionary leader is far-sighted and driven and inspired by what a company can become. Visionary
leaders work hard for the greater good and keep themselves updated with time and change. Ensuring a

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vision for the future with perseverance and keeping everybody invested in the process is what a
visionary leader does.
A visionary leader does not hold back to take risks and unconventional decisions.

7. Strong Communicator

Excellent communication is the key to good leadership. An effective leader knows how to put across
his message. They are good orators and communicate to get his/her work done. They are not harsh;
they choose words and expressions which suit the situation and allow others to express their thoughts
and ideas.

They understand how important it is to have good communication skills.. They are very conscious
and learn from others’ behaviors, which gives them a deep understanding of human complexities.

8. Delegation

The ability to delegate effectively is a good leadership quality. A good leader who knows how to
delegate wisely and make the best out of it. Delegation is crucial for maximizing productivity
and team performance. Also, a leader is the busiest person in any organization. Therefore knowing
when and how to delegate gives them more time for their most important work.

Also, an essential factor to note here is that the ability to delegate does not limit to delegating tasks to
others. It also means having the awareness and understanding of who has the necessary skills and
expertise to complete the task. Mindful delegation is vital to save time and future inconveniences.

You can also check our video!

9. Decision-making Skill

Good leaders are decisive and know how to help the organization, employees, stakeholders, and
customers.

You would never envision a leader who is unclear and uncertain. Good leaders are aware of the fact of
how their decisions can make or break businesses. They evaluate a given circumstance many a time
before coming to any conclusion. They collect the necessary information required before making any
announcements. Also, they do not believe rumors but examine a situation or a problem themselves
before making a decision.

10. Problem-Solving Skills

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Leadership roles are not only limited to management or delegating. Today for any business leaders, the
spectrum of leadership responsibilities have evolved. For the proper functioning of an organization,
leaders must have problem-solving skills and an eye for analyzing the situation to make better
decisions. When it comes to effective leadership, problem-solving skills are crucial.

Good leaders have this innate ability to respond to problems. They are equipped with the ability to
identify and define problems. Make the analysis, use data, and communicate to solve the issues.

Cultivating strong problem-solving skills is vital for any leader to eliminate barriers.

11. Fair Attitude

We all have personal biases. One who can think and act beyond this loop is what makes them different
from the crowd. These biases are one of the factors why most leaders fail to achieve greater heights.

Good leaders are fair to the employees and the organization's processes. They acknowledge the good
and always make room for everyone to thrive together.

They understand that nothing significant has ever been achieved with an attitude that is unfair and
biased. Even if it does, the sustainability of the outcome is always questionable.

Good leaders keep biases and unfairness out of the window and create a culture that does not promote
or acknowledge this attitude.

12. Inquisitiveness

Have you ever watched great leaders sharing stories and their experiences in Ted-talks? I presume you
have. If you haven't, I recommend you do it.

You would realize how knowledgeable and curious these leaders are. And how they are always open to
learning new things. Their thoughts, ideas, and perceptions are unique and thought-provoking.

The reason behind this is their inquisitiveness and curiosity from life. They pursue various interests
and keep themselves invested in it. They are open to broadening their spectrum through art,
technology, and science. And, in fact, all the world's know-how.

This quality helps them build a rational and positive attitude towards any problems.

13. Self-motivated

The great leaders of business, industry, and finance, and the great artists, poets, musicians and
writers all became great because they developed the power of self-motivation. ~Napoleon Hill

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One of the essential leadership traits of good leaders is their ability to motivate others. Good leaders
always motivate their employees and boost their morale when needed. They sail their boat smoothly,
even in hazardous situations. They keep themselves self-motivated and set an example to follow.

14. Humility

Humble leaders make the best leaders. This statement is not something I am claiming to be true. In his
seminal book 'Good to Great,' Jim Collins shows extensive research data on how humble and willful
leaders help their companies grow and sustain their market position.

Humility is not the first trait that comes to mind when we think about leadership. But it is one of the
essential qualities of a good leader. It is because humility often gets overshadowed by the flamboyance
of the celebrated leadership qualities.

Humble and willful leaders understand the fact that leadership is all about working for the greater
good. They lead to transform, not dominate. They are aware of their strengths and weaknesses and
always yearn to learn and contribute more.

15. Care for Others

The best leaders have a high consideration factor. They care about their people. ~Brian Tracy

Good leaders understand the value of the balance between work and life. They know that people’s
health and wellness associated with the organization play an important role in attaining success.
They inspire their team members and make sure the staff, clients, beneficiaries, and customers feel
trusted.

They understand the importance of appreciating and recognizing employees and creating mutual
respect and understanding within the organization.
They work towards giving them an environment where everyone can flourish.

16. Self-Discipline

Good leadership is in developing discipline in others. Good leaders are self-disciplined and have good
time management skills. They encourage a culture where people are disciplined. This is a quality in
which people can adapt themselves with persistence. When you are self-disciplined and set an
example, you motivate others to follow.

Great leaders always have self-discipline -without exception. ~John C. Maxwell

In an organization where everything is fast-paced, and employees get occupied with so much
workload, being more disciplined can help achieve more and keep the work environment at ease.
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 17. Emotional Intelligence

Emotional Intelligence is the capability to identify, manage, evaluate, and understand our own
emotions and the people around us.

According to the psychologist, Daniel Goleman, EI has five components-

 Self-awareness
 Self-regulation
 Empathy
 Motivation and
 Social skills
Good leaders are self-aware, act in control, take calculated decisions without getting carried away.
They understand other's perspectives without being cynical. They are self-motivated and have strong
social skills, which help them build connections and healthy relationships.

These explain that good leaders have a high degree of Emotional Intelligence. This is why EI is one of
the essential leadership attributes.

18. Passion

Passion is a common leadership trait found in most effective leaders across the world. They are highly
passionate about their goals and objectives. They know what they want and work tirelessly to achieve
those. Their passion is infectious and also very inspiring. They are highly committed to their goals and
also help others in achieving theirs.

Passionate leaders elevate productivity and ensure that the employees commit to their vision. Passion
helps leaders to instill motivation in their employees and helps to achieve the desired vision.

19. Resilience

Leaders must be tough enough to fight, tender enough to cry, human enough to make mistakes,
humble enough to admit them, strong enough to absorb the pain, and resilient enough to bounce
back and keep on moving. ~Jesse Jackson

One must understand their self before taking responsibility for others. Resilient leaders are perceptive
and also know how to handle themselves in any good or bad situation.

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Resilient leaders are capable of retaining their energy level under strain and responding to disruptive
changes. They also overcome severe challenges without destructive behavior or hurting others.
Resilient leaders are high performing leaders who recover from any adversity positively.

20. Accountability

Being an accountable leader is not an easy task. It means you can own up to commitments and
promises you made. It means being answerable to the actions and decisions made by you and by those
you lead. Accountable leaders establish clear goals and targets. They focus on the future and also own
up to their mistakes. They ask for help when needed and provide honest and constructive feedback.

Accountability is the glue that ties commitment to the result. ~Bob Practor

21. Supportive

Leadership without support is like trying to make bricks without enough straw. True leaders
reinforce their ideas and plans with strategic partnerships, alliances, and supportive audiences.
~Reed Markham

Supportive leaders give the guidance that you need. Supportive leaders mentor you, guides you till you
need little to no supervision in the future. They do not believe in delegating tasks and expecting results
right away. They are with you in the process and support you with their knowledge and experiences.
Supportive leadership involves building trust among the team members and encouraging dialogue to
keep the team spirit high. The fundamentals of supportive leadership are, therefore, promoting
teamwork, building relationships, and commitment.

22. Tech-savvy

For digital transformation, the world needs Tech-Savvy leaders. Today's leader needs to understand the
technology sufficiently to sustain their business. The organization's technology decisions must be
guided with a strategy and transforming its analog experience into a digital. The majority of the
companies worldwide are digital today, and it will only grow exponentially with time. Therefore, it
becomes evident that business leaders enhance technological skills for sustainability and making better
decisions.

Our future success is directly proportional to our ability to understand, adapt, and integrate new
technology into our work. ~Sukant Ratnakar

23. Empathy

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Empathy is a core leadership trait that helps you nurture your team. Empathy is in understanding
others' needs and what goes into their mind. We live in a world with a constant communication loop,
and people interact with each other at much ease. But at the same time, people are less empathetic
towards each other. Many communicate to express but not to understand others perspectives.

Empathetic leaders are perceptive, and they are aware of other's feelings and thinking. Being
empathetic does not always mean to agree on other's views, but to appreciate and have a willingness to
understand.

Leadership is about empathy. It is about having the ability to relate to and connect with people
for the purpose of inspiring and empowering their lives. ~Oprah Winfrey

24. Learning Agility

Agile leaders make the best response to organizational change and uncertainty. Today we need leaders
who are quicker in decision-making and who can take immediate action in crisis times. We live in a
fast-paced world, and work trends are evolving in no time. Therefore there is little time for all to take
calculated decisions. Also, the strategies and policies that worked well in the past can be obsolete
today. One of the visible examples is the Covid-19 crisis. The crisis had changed the landscape of
work culture, and leaders had to find new strategies to fight the storm overnight.

The future of work will always be uncertain and ambiguous. Future events will bring new challenges.
Organizations now will only thrive in the future under the supervision of leaders who can make sense
of uncertainty.

25. Empowerment

Great leaders can empower their team members to achieve maximum productivity and organizational
success.

Empowerment gives the team members equal decision-making opportunities and uses their power of
judgment and expertise to develop solutions. This builds the sense of individual worth and also
employees' commitment towards their organization. Every individual brings their skills and talents to
the table that often finds a route to flow. Usually, you would have skillful team members, but lack of
guidance and motivation fails to bring them the best.

It is, therefore, on leaders how they foster these skills by empowering them. Good leaders know how
to unleash positive traits in others. They understand that the only way to do that is by empowering
them. Therefore, leaders take it as a daily practice to continuously empower people and strengthen the
team.

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Types of leadership

Leadership styles can be unique to each individual. However, experts agree that most leaders fit into at
least one of these nine different leadership styles. Lindor said when you analyze which leadership style
you use, keep in mind that there are no right or wrong styles.

“It’s all about pairing leadership styles with the right organizational fit, market, timing and needs in a
way that drives successful outcomes,” she said.

1. Autocratic leadership: This is one of the strictest types. Autocratic leaders tend to have
complete control over the decision-making process. This leadership style can be effective when
decision-making is urgent or workmanship is routine.
2. Bureaucratic leadership: Although not as strict as autocratic leaders, bureaucratic leaders also
tend to strictly enforce regulations and statuses in the hierarchy. This leadership style can be
effective in healthcare and safety environments.
3. Charismatic leadership: Charismatic leaders have an infectious presence that motivates their
team to follow their lead. Their likability helps them and their teams achieve success in
business. This leadership style can be effective in high-energy work environments that need a
lot of positive morale.
4. Democratic leadership: Unlike autocratic or bureaucratic leaders, a democratic leader often
welcomes subordinate participation in decision-making. This leadership style is often admired
and can be effective in creative work environments that don’t require quick decisions.
5. Laissez-faire leadership: Laissez-faire leaders have a hands-off approach and let their
employees assume responsibility in the decision-making process, although they must still set
employee expectations and monitor performance. This leadership style can be effective when
working with highly experienced and confident employees.
6. Servant leadership: Servant leaders share power and decision-making with their subordinates
and often direct the organization based on the team’s interests. This leadership style can be
effective for humanitarian organizations, nonprofits and teams that need to create diversity,
inclusion and morale.
7. Situational leadership: Situational leaders implement a range of leadership types and modify
their style based on the needs of their employees and the environment. Because of its
versatility, this type of leadership is effective in most organizations.
8. Transactional leadership: A transactional leader uses a reward/consequence system to
motivate employees toward success and discourage them from failure. This leadership style can
be effective for teams that are motivated by rewards.
9. Transformational leadership: Like charismatic leaders, transformational leaders use their
inspiring energy and personality to create an engaged workplace. This style is often more
effective than charismatic leadership, as it also motivates teams to build confidence and
accountability. It can be effective in organizations with intellectual team members who thrive
in interactive environments.

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“The leadership styles that I most admire are transformational, which is about articulating an inspiring
vision and helping people reinvent themselves and their company; servant leadership, which is all
about taking care of your clients, employees and the general community; and situational leadership,
which is all about creating an agile way of leading and thinking depending on the needs of the
organization or marketplace,” Lindor said.

Autocratic leadership
This is defined by a top-down approach when it comes to all decision-making, procedures and policies
within an organisation. An Autocratic Leader focuses less on collecting input from team members and
tends to make executive decisions that others are expected to follow.

The phrase most illustrative of an Autocratic Leadership style is “Do as I say”. This command-and-
control approach is used less and less in organisations today, however, it may be appropriate in certain
situations. You might use an Autocratic Leadership style when crucial decisions need to be made as a
matter of urgency and there’s no time to wait.

One example of when the Autocratic Leadership style could be effective is if there was a fire in the
building where one person needs to direct everyone safely out without being questioned.

The pros of Autocratic Leadership include:

 Can be efficient, especially when it comes to decision-making.
 One person taking charge can keep teams cohesive and consistent.
 Can reduce an individual’s stress by the leader making decisions quickly.
 May make everyone’s individual roles clearer since they are delegated specific duties and are
not encouraged to step outside of that role.
The cons of Autocratic Leadership include:
 Can stifle creativity, collaboration, innovation and diversity in thought.
 Highly stressful because the leader feels responsible for everything.
 Often resented by individuals as the leader lacks flexibility and often does not want to hear
others’ ideas, leaving them feeling that they don’t have a voice.
Authoritative leadership
Unlike Autocratic Leaders, Authoritative Leaders take the time to explain their thinking to others, they
don’t just issue orders. Most of all, they allow people choice and autonomy on how to achieve
common goals.

Leaders using this leadership style are often confident people, who map the way and set expectations,
while engaging and energising followers along the way. This style may also be called Visionary
Leadership. The phrase most illustrative of an Authoritative Leadership style is, “Follow me”.

50
Authoritative Leaders help people see where the organisation is going and what is going to happen
when they get there.

One example of when the Authoritative Leadership style could be effective is in changing and
uncertain times, as these leaders give a clear vision of what needs to be done to succeed.

The pros of Authoritative Leadership include:

 Motivating for the team.
 Beneficial for building strong relationships and encouraging collaboration.
 Empowers team members with autonomy to do their jobs.
 Can lead to more creativity and innovation.
The cons of Authoritative Leadership include:
 Pressure on the leader, who needs to lead by example.
 Can cause feelings of instability by disrupting the status quo.
 May not be a good culture fit for a more “traditional hierarchical” organisational culture.
Pacesetting leadership
Pacesetting Leadership focuses on performance and achieving goals. Leaders expect excellence from
themselves and their teams, and will often jump in to make sure that goals are met.

Whilst the pacesetter style of leadership is effective in getting things done and driving for results, it is
an approach that can cause stress to the leader and team members in the long run working under this
kind of pressure. Pacesetters set the bar high and push their team members to run hard and fast to the
finish line. The phrase most illustrative of a Pacesetter Leadership style is “Keep up!”.
An example of when this leadership style is most effective is when an energetic entrepreneur is
working with a like-minded team developing and announcing a new product or service ahead of the
competition.

The pros of Pacesetter Leadership include:

 Highly self-motivated and a strong desire to succeed.
 Reaching time critical, short-term results.
 Leading teams that need little direction or co-ordination.
 Inspiring high performance, high pace and high quality.
The cons of Pacesetter Leadership include:
 Values results more than anything, including the team.
 Detrimental for employee engagement and motivation in the long run.
 Individuals can feel stressed, overwhelmed and receive little or no feedback or development.
Democratic leadership
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This is the most participative leadership style. A Democratic Leadership style gets people to do what
you want to be done but in a way that they want to do it. It motivates individuals by empowering them
to take a full part in the decision-making process. Ideas and suggestions can be brought forward by any
team member, and the Democratic Leader facilitates and asks questions until there is consensus in
decision-making.

The Democratic Leader is still the one making the final decision or approving the decision of the team.
The phrase most illustrative of a Democratic Leadership style is “All for one and one for all”. An
example of when this leadership style is most effective is when you want to generate trust and promote
team spirit and cooperation from individuals, such as when reviewing and improving business
processes and gaining “buy-in” for change.

The pros of Democratic Leadership include:

 Creativity and innovation are encouraged, valuing the process of generating new ideas.
 Collaboration creates strong solutions for complex issues.
 High employee engagement and involvement.
 Higher productivity.
 A strong feeling of team accountability.
The cons of Democratic Leadership include:
 Can cause confusion, delays and conflict.
 Can lack focus and direction.
 Some team members’ ideas and opinions may get more attention than the ideas of others,
causing resentment.
 Collaborative decision-making is time-consuming.
 The team may have limited expertise or experience to contribute fully.
 Employees can get too used to being involved in decision-making and expect to be included in
all decisions, even when it is not appropriate, possibly causing conflict.
Coaching leadership
A Coaching Leader gives people direction to help them develop and utilise their abilities to achieve
their full potential. They are focused on bringing out the best in their teams by guiding them through
obstacles to achieve their goals.

Coaching Leadership depends heavily on the leader’s ability to direct and support. They will give
directions to help team members develop their skills, and this takes time and excellent communication
skills to provide constructive feedback on the individual’s performance, which is a core part of
Coaching Leadership.

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The phrase most illustrative of a Coaching Leadership style is “What else could you try?” An example
of when this leadership style is most effective is when the leader takes time to manage and develop
talent, setting clear objectives and providing motivational feedback to improve performance.

The pros of Coaching Leadership include:

 Encourages two-way communication and collaboration.
 Helps people improve their skills so that they can perform at their best.
 Individuals don’t have to guess what is required from them, the objectives and goals are clear.
 Having support makes meeting performance expectations motivating for individuals.
 Helps to identify weaknesses, and transform them into strengths.
 Enables organisations to develop talent and grow a highly skilled workforce.
 Promotes trust and empowerment.
The cons of Coaching Leadership include:
 Requires a lot of one-to-one time and patience.
 Doesn’t always lead to the fastest, most efficient results.
 The leader must have confidence, experience and the ability to give meaningful feedback or the
effect could be negative.
 Leaders often have to prioritise achieving their own goals, and coaching takes a lower priority
which can be demotivating for the team.
 Team members are not committed to the process.
 Team members are resentful, defensive or disregard the feedback given in coaching.
Affiliative leadership
This style, also known as Collaborative Leadership, is all about encouraging agreement and forming
cooperative relationships within and between teams. It strategically and explicitly focuses on people,
gaining loyalty and support to get tasks done.

Affiliative Leaders recognise and reward the personal characteristics and behaviours used to carry out
tasks as much as the delivery of the task itself. In other words, not only what is done but how
something is done. They encourage and develop positive working relationships between often diverse
and conflicting groups and motivate individuals by supporting them during highly monotonous or
stressful times.

The phrase most illustrative of an Affiliative Leadership style is “People come first”. An example of
when this leadership style is most effective is when leading a cross-functional project team to
encourage collaboration with other teams, departments and outside contractors to accomplish a shared
goal.
The pros of Affiliative Leadership include:
 Offers more opportunities for diversity.
 Builds trust within an organisation.
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  Strengthens cross-functional working relationships.
 Recognises and rewards people skills.
 Teams handle emotional challenges better.
 Employees experience less stress and higher autonomy.
The cons of Affiliative Leadership include:
 Potential for power struggles between departmental leaders.
 Task-orientated individuals see interpersonal relationships as inappropriate, unnecessary or
distracting.
 Can hamper results, prioritising people over the task in hand.
 Underperformance can be overlooked, resulting in low standards.
 Can foster a sense of favouritism and frustration.
 Lacks clear direction in times of crises.
Laissez-faire leadership
This leadership style is at the opposite end of the continuum from Autocratic Leadership. When taken
to the extreme the hands-off leader may end up appearing indifferent and remote. However, a Laissez-
faire Leader trusts people to know what to do and works well when leading highly skilled, experienced
individuals and teams who are motivated self-starters.

Laissez-faire Leaders still provide their teams with the resources and tools they need to succeed but
they remain generally uninvolved in the day-to-day work. The phrase most illustrative of a Laissez-
faire Leadership style is “let you do” which is also the literal translation from French.

An example of when this leadership style is most effective is when the leader is confident in the
abilities of their team and empowers them to carry out their roles, providing them with timely feedback
on headway so that the leader can monitor progress and achievement.

The pros of Laissez-faire Leadership include:

 Encourages trust between team members and leader.
 Inspires independent thinking and acting.
 Less fear of failure.
 Can lead to increased creativity and innovation.
 Empowers individuals.
 Promotes the concept of self-managing teams.
The cons of Laissez-faire Leadership include:
 Often hard for leaders to “let go” enough.
 Leaders can appear too distant and unapproachable.
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  Can result in low productivity.
 Not effective with unskilled or unmotivated individuals.
 Conflict can occur between team members.
 Team members may vie to fill the leadership void.
In conclusion
Strong leadership requires an understanding of the complex mix of traits and behaviours that can
inspire and motivate success; no one leadership style fits every situation. As we have seen, different
work situations call for different leadership styles; the appropriate style will be the one you match with
particular circumstances and people

Developing as a leader means being able to identify what type of leadership is needed, using the
strategy that is likely to work best and being flexible enough to change your style if required. Effective
leaders will move seamlessly between leadership styles as situations demand, in order to be effective
leaders.

Qualities of a good leader

1. Integrity

Integrity is an essential leadership trait for the individual and the organization. It’s especially important
for top-level executives who are charting the organization’s course and making countless other
significant decisions. Our research has found that integrity may actually be a potential blind spot for
organizations, so make sure your organization reinforces the importance of honesty and integrity to
leaders at various levels.

2. Delegation

Delegating is one of the core responsibilities of a leader, but it can be tricky to delegate effectively.
The goal isn’t just to free yourself up — it’s also to enable your direct reports to grow, facilitate
teamwork, provide autonomy, and lead to better decision-making. The best leaders build trust in the
workplace and on their teams through effective delegation.

3. Communication

Effective leadership and effective communication are intertwined. The best leaders are skilled
communicators who are able to communicate in a variety of ways, from transmitting information to
inspiring others to coaching direct reports. And you must be able to listen to, and communicate with, a
wide range of people across roles, geographies, social identities, and more. The quality and
effectiveness of communication among leaders across your organization directly affects the success of

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your business strategy, too.

4. Self-Awareness

While this is a more inwardly focused trait, self-awareness and humility are paramount for leadership.
The better you understand yourself and recognize your own strengths and weaknesses, the more
effective you can be as a leader. Do you know how other people view you or how you show up at
work? Take the time to learn about the 4 aspects of self-awareness and how to strengthen each
component.

5. Gratitude

Being thankful can lead to higher self-esteem, reduced depression and anxiety, and better sleep.
Gratitude can even make you a better leader. Yet few people regularly say “thank you” in work
settings, even though most people say they’d be willing to work harder for an appreciative boss. The
best leaders know how to show gratitude in the workplace.

6. Learning Agility

Learning agility is the ability to know what to do when you don’t know what to do. If you’re a “quick
study” or are able to excel in unfamiliar circumstances, you might already be learning agile. But
anybody can foster and increase learning agility through practice, experience, and effort. After all,
great leaders are really great learners.

7. Influence

For some people, “influence” feels like a dirty word. But being able to convince people through the
influencing tactics of logical, emotional, or cooperative appeals is an important trait of inspiring,
effective leaders. Influence is quite different from manipulation, and it needs to be done authentically
and transparently. It requires emotional intelligence and trust.

8. Empathy

Empathy is correlated with job performance and is a critical part of emotional intelligence and
leadership effectiveness. If you show more inclusive leadership and empathetic behaviors toward your
direct reports, our research shows you’re more likely to be viewed as a better performer by your boss.
Plus, empathy and inclusion are imperatives for improving workplace conditions for those around you.

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9. Courage

It can be hard to speak up at work, whether you want to voice a new idea, provide feedback to a direct
report, or flag a concern for someone above you. That’s part of the reason courage is a key trait of
good leaders. Rather than avoiding problems or allowing conflicts to fester, having courage enables
leaders to step up and move things in the right direction. A workplace with high levels of
psychological safety and strong conversational skills across the organization will foster a coaching
culture that supports courage and truth-telling.

10. Respect

Treating people with respect on a daily basis is one of the most important things a leader can do. It will
ease tensions and conflict, create trust, and improve effectiveness. Creating a culture of respect is about
more than the absence of disrespect. Respectfulness can be shown in many different ways, but it often
starts with simply being a good listener who truly seeks to understand the perspectives of others.

Leadership Theories

1. The Transactional Theory or Management Theory

Well during Industrial Revolution, this transactional theory was developed to boost
company productivity. It is a leadership approach that emphasizes the value of hierarchy for enhancing
organizational effectiveness. These managers place high importance on structure and utilize their
authority to enforce rules to inspire staff to perform at their best. In accordance with this philosophy,
workers are rewarded for achieving their given objectives. The concept also presupposes that workers
must comply with managerial directives.

Managers who practice transactional leadership keep an eye on their staff, making sure they are
rewarded for reaching milestones and disciplined when they fall short. These executives, however, do
not serve as a trigger for a company's expansion. Instead, they concentrate on upholding the
organization's policies and standards to ensure that everything goes as planned.

Leaders Who Practice Transactional Leadership:

 Target immediate objectives.

 Favor standardized processes and regulations

 Recent changes
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 Discourage original thought

 Emphasis on one's own interests

 Encourage performance

When there are challenges that are clearly stated and the main goal is to finish a work, transactional
leadership works well.

2. Theory of Transformation

The relationship between leaders and staff can help the organization, according to the transformational
theory of management. This leadership theory contends that effective leaders inspire workers to go
above and beyond what they are capable of. Leaders develop a vision for their team members and
motivate them to realize it.

Employee morale is raised and inspired by transformational leaders, which helps them perform better
at work. These managers encourage staff members by their deeds rather than their words because they
specialize in setting an example.

Leaders Who Practice Transformational Leadership:

 Self-manage

 Set an example

 Give interaction a high priority

 Be proactive in your work

 Promote the development of employees

 Receptive to fresh concepts

 Take chances and make difficult choices

Transformational leaders, as opposed to transactional leaders, prioritize failed processes and gather
personnel who get along well to accomplish shared corporate objectives. Additionally, effective
executives prioritize the requirements of the organization and its employees over their own.

3. The Theory of Contingencies

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According to the contingency hypothesis, there is no one right way to run an organization.
Determining the optimal strategy for leading an organization to achieve depends on both internal and
external considerations. The right candidate should fit the correct scenario, according to the
contingency theory.

The following elements influence the leadership style, based on contingency theory:

 Management approach

 Work speed

 Organizational policies and culture

 Employee spirit

 Employees' level of maturity

 Relationship between coworkers or members of a team

 Organizational objectives

 Environment and routine at work

The management strategy that will help the organization achieve its objectives in a particular situation
is decided by the leader.

According to this view, situations determine whether or not leaders are effective. No matter how
successful a leader is, the idea explains, difficult situations will always arise. It emphasizes that the
leaders are aware that the conditions in combination with their abilities have a role in their
achievement.

4. The Theory of Situations

Similar to the contingency theory, this idea emphasizes the significance of context and holds that a
leader should adjust to the shifting context to achieve objectives and make judgments. The level of
competence and dedication of the team members can influence how these leaders choose to lead.

Situational leadership, as per situational theory:

 Develop a connection with the workforce

 Encourage employees

 Recognize when alternative leadership philosophies are required in a given situation

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 Develop teams and organizational units

The idea also distinguishes four main leadership styles:

1. Telling: Managers instruct staff members on what needs to be done and how to go about it.

2. Selling: Team members are persuaded to adopt a leader's concepts or ideas.

3. Participating: Effective leaders encourage their team members to take an active part in problem-
solving and decision-making processes.

4. Delegating: Limiting their involvement, leaders hand off the majority of the work to the team. Such
leaders defer to the group for decision-making but they are always ready for advice.

The theory lists a few essential traits of a situational leader, such as problem-solving abilities, trust,
adaptability, insight, and coaching.

5. The Great Man Theory

One of the first theories on leadership makes the assumption that these qualities are inherent, which
indicates that leaders are born, not created, and cannot be learned. This hypothesis asserts that a leader
has certain innate human characteristics, such as:

 Glamour

 Decisive

 Wisdom

 Daring

 Assertiveness

 Appeal

This viewpoint emphasizes the fact that individuals cannot be taught to be effective leaders. It's a
quality that either you have or you don't. These abilities come naturally, thus you cannot learn them or
receive training in them.

In addition, the idea holds that these leadership qualities are constant over time and apply to all
organizations, regardless of the setting in which these leaders are employed. The idea that exceptional
leaders emerge when they are required is another tenet of this leadership ideology.

6. The Trait Theory

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The great man theory is expanded upon by the trait theory of leadership, which is predicated on the
idea that effective leaders have particular personality qualities and features of behavior. They can
become effective leaders in a number of circumstances thanks to these qualities. It also promotes the
idea that certain people are more naturally gifted as leaders than others. Effective people have hobbies
and personality traits that are very different from those of non-leaders.

The main characteristics of a successful leader are:

 Emotional equilibrium

 Acknowledging one's duty

 Competence

 Recognising obstacles

 Thinking with action

 Motivational abilities

 Talents in communication

 Tenacity and flexibility

 Making decisions with assurance

You can learn more about your limitations and strengths with the help of this leadership idea. Then,
you can try to strengthen your areas of weakness.The ideal person for a leadership position is chosen
by many organizations using the trait approach.

7. Behaviorist Theory

According to this view, a person's leadership abilities are a product of their environment. Different
learning talents contribute to effective management. The behavioral idea holds that leaders are formed
and trained, not born, in contrast to the model of leadership. In other words, a leader's performance is
not influenced by their inherent traits because leadership qualities are driven by behavior. Anyone is
capable of becoming a leader with the right training and instruction.

According to the theory, in order to boost the output and morale of their team, managers should be
mindful of their own behavior. This theory classifies managers into the following categories depending
on the leadership styles it acknowledges:

 Task-focused managers

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 Leaders who put people first

 Apathetic leaders

 Effective leaders

 Dictatorial authorities

 Current authorities

 Reliable leaders

 Shrewd businesspeople

 Daddy-like bosses

 Heads of Country Clubs

It is simple to assess the style of leadership of construction professionals, team leaders, or indeed any
skilled leader using the behavioral theory.

8. Behavioral Theory

Behavioral leadership theory focuses on the actions of leaders and holds that other leaders are able to
imitate similar actions. Because it is sometimes known, the design theory contends that successful
leaders could also be developed through teachable conduct rather than being born with it. The
behaviors of a pacesetter are extensively emphasized in behavioral theories of leadership; this theory
contends that observing a leader's behavior is the best indicator of how successful their leadership will
be. The behavioral learning hypothesis emphasizes behavior instead of traits. Consistent with this idea,
observable patterns of conduct are classified as "styles of leadership." Task-oriented leaders, club
leaders, people-oriented leaders, dictatorial leaders, status-quo leaders, and more are some samples of
leadership styles.

9. Functional Theory

The functional theory of leadership emphasizes how employment or organization is being led rather
than who has been formally designated as the leader. Within the functional leadership approach, the
power to get things done is supported by a collection of people's behaviors rather than one individual.

10. Integrated Psychological Theory

Integrative leadership may be a new style of leadership that encourages cooperation across a variety of
barriers in order to advance the common good. It combines leadership theories and techniques that
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have their roots in five important societal spheres: industry, government, nonprofits, the media, and the
community.

3.1.5Motivation as Function of Management

According to Memoria A willingness to expend energy to achieve a goal or reward. It is a force that
activates dormant energies and sets in motion the action of the people. It is the function that kindles a
burning passion for action among the human beings of an organisation.

According to Dalton E. McFarland, Motivation refers to the way in which urges, drives, desires,
aspirations, striving, or needs direct, control or explain the behaviour of human beings.

According to The Encyclopaedia of Management, Motivation refers to the degree of readiness of an

organism to pursue some designated goal and implies the determination of the nature and locus of the
forces, including the degree of readiness.

In the words of Vitiles, Motivation represents an unsatisfied need which creates a state of tension or
disequilibrium, causing the individual to make in a goal-directed pattern towards restoring a state of
equilibrium by satisfying the need.

Importance of Motivation in Management

Motivated employees are the key to the success of any business organisation. It is the factor of
motivation that enhances the level of performance for attaining organisational goals. Positive
motivation among employees increases the performance and negative motivation brings down the
performance of the organisation.

The importance of motivation in management for the employees and the enterprises is as follows:
1. Leads to Higher Efficiency
2. Minimises Absenteeism
3. Improves the Morale of the People
4. Leads to Good Relations
5. Leads to Lesser Employee Turnover
6. Enhances the Image of the Enterprise
7. Reduces Wastages and Breakages
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8. Minimises Accidents
9. Leads to Better Initiative and Innovation

Nature of Motivation in Management

Motivation is a psychological process that initiates certain actions and behaviours in an individual to
achieve a specific outcome. The various forces that activate the specific behaviour are due to the
emotional, biological, social and other cognitive elements.

It is the force that drives a person to behave or act in a certain manner. It is a desire or needs that are
generated to prompt or motivate people to satisfy their needs and steer ahead. The nature of
motivation involves the following situations:
1. The person is energised due to an inner feeling which motivates him to work more.

2. There could be a motive that can result in any form of actions and behaviours.

3. An individual is prompted to do a specific work due to his/her emo- S tions or desires.

4. The individual’s balance is disturbed due to certain unsatisfied needs of a person.

5. Unsatisfied needs of an individual are fulfilled by utilising his en- ergies towards a specific
direction.

6. The nature of motivation can have a positive or a negative impact on the behaviour of the person.

7. Energies that are lying dormant in an individual are energised by directing them into certain
behaviour or actions.
Types of Motivation in Management
The following are two types of motivation in management given below:
1. Intrinsic Motivation
2. Extrinsic Motivation
Intrinsic Motivation
This form of motivation arises from within the individual. Intrinsic motivation is also based on the
needs and desires of an individual for their satisfaction. Intrinsic motivation leads to a better quality of
life and has a long-term effect. A few examples of intrinsic motivation are:

1. When a kid cleans up his own room because he likes every- thing neat and clean.

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2. Working for a low-paying job when other options are available only because a person is passionate
about his work.

3. Visiting different places because one likes to explore new plac- es and get to know different
cultures and people.

4. Working in a team because one likes to collaborate with differ- ent people
Extrinsic Motivation
This form of motivation arises from external conditions that could include certain incentives, rewards,
recognition, monetary incentive, etc. Extrinsic motivation, sometimes, also come in a negative form.
Punishment, disciplinary action, cutting of salary, being criticised etc. are some of the negative
extrinsic motivation factors. A few examples of extrinsic motivation are:

1. When a kid cleans up his own room because he does not want to be scolded by his parents.

2. Working only because one must earn money for surviving and taking care of family.

3. Visiting different places only to post pictures on social media.

4. Working in a team as it is a workplace requirement.

Types of Motivation Levels in Management

There are two types of motivation levels in management:

1. Positive Motivation
2. Negative Motivation
Positive Motivation
This form of motivation is based on rewards and recognition. Employees are offered incentives and
promotions in recognition of their work. According to Peter Drucker, “the real and positive motivators
are responsible for placement, high standard of performance, information adequate for self-control and
the participation of the worker as a responsible citizen in the plant community.

Positive motivation is achieved by the cooperation of employees and they have a feeling of happiness.”
A few examples of positive motivation are:

1. A salesperson, who works hard and stays motivated by the amount of incentives, would get on
completing targets.
2. Workers are often motivated by appreciation, acceptance by group and rewards.
3. Transparent policies and practices at work usually motivate employees.
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 Negative Motivation
This motivation takes place in the form of punishments. It creates a sense of fear and insecurity among
employees when they are punished, demoted or have to go through layoffs. This makes employees
uncooperative and unwilling to put in their best efforts.

A few examples of negative motivation are:

1. A salesperson who works hard and stays motivated because he/she does not want to take a pay-cut
if he/she does not meet the targets.

2. Workers are negatively motivated by lay-offs, transfers, penal- ties, group rejection, etc.

There are two types of motivation, Intrinsic and Extrinsic motivation. It's important to understand that
we are not all the same; thus effectively motivating your employees requires that you gain an
understanding of the different types of motivation. Such an understanding will enable you to better
categorize your team members and apply the appropriate type of motivation. You will find each
member different and each member's motivational needs will be varied as well. Some people respond
best to intrinsic which means "from within" and will meet any obligation of an area of their passion.
Quite the reverse, others will respond better to extrinsic motivation which, in their world, provides that
difficult tasks can be dealt with provided there is a reward upon completion of that task. Become an
expert in determining which type will work best with which team members.

Intrinsic Motivation

Intrinsic motivation means that the individual's motivational stimuli are coming from within. The
individual has the desire to perform a specific task, because its results are in accordance with his belief
system or fulfills a desire and therefore importance is attached to it.

Our deep-rooted desires have the highest motivational power. Below are some examples:

 Acceptance: We all need to feel that we, as well as our decisions, are accepted by our co-workers.
 Curiosity: We all have the desire to be in the know.
 Honor: We all need to respect the rules and to be ethical.
 Independence: We all need to feel we are unique.
 Order: We all need to be organized.
 Power: We all have the desire to be able to have influence.
 Social contact: We all need to have some social interactions.
 Social Status: We all have the desire to feel important.

Extrinsic Motivation

Extrinsic motivation means that the individual's motivational stimuli are coming from outside. In other
words, our desires to perform a task are controlled by an outside source. Note that even though the

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 stimuli are coming from outside, the result of performing the task will still be rewarding for the
individual performing the task.

Extrinsic motivation is external in nature. The most well-known and the most debated motivation is
money. Below are some other examples:

 Employee of the month award

 Benefit package
 Bonuses
 Organized activities

Process of Motivation in Management

A motive is an inner state that energizes, activates, or moves and directs or channels behaviour goals.
The different steps involved in the motivation process are as follows:
1. Identifying the Needs and Motives
2. Searching Ways to Satisfy Needs
3. Taking Action to Satisfy Needs and Motives
4. Accomplishing the Goal
5. Reviewing Employee Performance
6. Providing Feedback of Performance
Identifying the Needs and Motives
Identifying the needs and motives: The first step in the motivation process is the identification of the
need and the motive behind the drive for attaining the goals.

Searching Ways to Satisfy Needs

Searching for ways to satisfy needs: The second step involves looking for various alternatives for
satisfying the needs identified in the previous step. The needs lead to action or behaviour that steers the
decision of the individual’s need for satisfaction.

Taking Action to Satisfy Needs and Motives

Taking action to satisfy needs and motives: Implementing the action directed by the motive for
satisfying the needs of the individual.

Accomplishing the Goal

Accomplishing the goal: The behaviour or activities are initiated towards the attainment of the goals by
the person. The right action needs to be selected from the alternatives for satisfying the need.

Reviewing Employee Performance

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Reviewing employee performance: The performance of the employees is reviewed and this initiates the
action that guides the decision of the employee to follow a specific course of action that affects their
form of performance.

Providing Feedback of Performance

The course of action taken by the individual leads to positive performance that the person is likely to
repeat the same in the future. But if the feedback for the performance is negative then the person will
not repeat the action.

Motivation Techniques
Motivation is an important technique that is used by management. The management motivates the
workforce for getting the work done from them. There are several motives in the form of incentives
that are given to the employees which act as the tools and techniques for motivating them.
The tools and techniques used by organisations to motivate people are as follows:

1. Incentives
2. Non-financial Incentives
Financial incentives
Incentives provided to employees act as stimulants and also induce certain actions and behaviours from
employees. They have a positive impact on employees and motivate them to put in their total energies
to perform better. Organisations use different forms of incentives to motivate their employees that are
classified as:

Financial incentives
Money has an important role in motivating people to do their work. Money satisfies the physiological
and social needs of people and provides security to many people. Money is also seen as satisfying the
social needs of people by providing them power, status and respect. Money is used in many different
ways, which include wages, bonuses, salaries, perks, medical benefits, retirement benefits and more.

There are the many reasons why the workers prefer the financial incentives that act as a motivating
factor:

1. Determines a direct relationship between efforts and rewards.

2. Satisfies their basic needs and take care of their social needs.
3. Provides monetary security to employees for old age, accidents, and sickness, and protects against
uncertainties.
4. Provides self-confidence to people and helps them to set higher goals for themselves.
5. Provides a sense of responsibility to employees for earning more monetary rewards.
Non-financial Incentives
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Non-financial incentives can be put into the following categories:

1. Work Appreciation
2. Healthy Competition
3. Group Incentive
4. Participation of Workers
5. Growth Opportunity
6. Job Enrichment

Work Appreciation
Appreciation of the work done by an individual is a big motivator. People being praised at work, in
school or university or at home works as a big morale booster and is an effective non-financial
incentive.

For example, Bob Steele, an employer, wrote an appreciation letter to his employee Ernie.

Healthy Competition
Healthy competition in the workforce inspires them to put in their best efforts to achieve their personal
or group goals. Hence, competition acts as an important non-financial incentive for employees.

For example, competition among different sales teams of an organisation encourages healthy
competition. When sales teams put in their best efforts, it leads to positive results for their respective
branches and the overall organisation.

Group Incentive
Group incentive helps to boost and steer the team to perform better. It is more effective than individual
incentives to motivate employees. It helps to improve team spirit among employees and makes the
group work together as a team.

For example, many organisations offer different types of group incentive plans such as salon plans, co-
partnership and profit-sharing, cash incentives, etc. for promoting teamwork.

Participation of Workers
When the management of the organisation invites workers to take part in decision making, it creates an
impact on them and motivates them. Workers feel important that they are being heard by the
management which is a good motivating tool.

For example, employees are encouraged to meet regularly and engage in joint decision making by
establishing quality control circles.

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Growth Opportunity
Individuals like to move ahead in their careers since people are ambitious and want to grow in their
careers. When employees are given growth opportunities for their career advancement, they feel
satisfied and become more committed to their work and goals.

For example, many organizations offer internal job postings and job rotations in order to provide
growth opportunities to their employees.

Importance of Motivation in general

Motivation is a very important for an organization because of the following benefits it provides:

1. Puts human resources into action

Every concern requires physical, financial and human resources to accomplish the goals. It is
through motivation that the human resources can be utilized by making full use of it. This can be
done by building willingness in employees to work. This will help the enterprise in securing best
possible utilization of resources.

2. Improves level of efficiency of employees

The level of a subordinate or a employee does not only depend upon his qualifications and
abilities. For getting best of his work performance, the gap between ability and willingness has to
be filled which helps in improving the level of performance of subordinates. This will result into-

a. Increase in productivity,
b. Reducing cost of operations, and
c. Improving overall efficiency.
3. Leads to achievement of organizational goals

The goals of an enterprise can be achieved only when the following factors take place :-

a.There is best possible utilization of resources,

b.There is a co-operative work environment,
c.The employees are goal-directed and they act in a purposive manner,
d.Goals can be achieved if co-ordination and co-operation takes place simultaneously which
can be effectively done through motivation.
4. Builds friendly relationship

Motivation is an important factor which brings employees satisfaction. This can be done by
keeping into mind and framing an incentive plan for the benefit of the employees. This could
initiate the following things:

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 a. Monetary and non-monetary incentives,
b. Promotion opportunities for employees,
c. Disincentives for inefficient employees.

In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a
manager. This would help in:

iv. Effective co-operation which brings stability,

v. Industrial dispute and unrest in employees will reduce,
vi. The employees will be adaptable to the changes and there will be no resistance to the
change,
vii. This will help in providing a smooth and sound concern in which individual interests will
coincide with the organizational interests,
viii. This will result in profit maximization through increased productivity.
5. Leads to stability of work force

Stability of workforce is very important from the point of view of reputation and goodwill of a
concern. The employees can remain loyal to the enterprise only when they have a feeling of
participation in the management. The skills and efficiency of employees will always be of
advantage to employees as well as employees. This will lead to a good public image in the market
which will attract competent and qualified people into a concern. As it is said, “Old is gold”
which suffices with the role of motivation here, the older the people, more the experience and
their adjustment into a concern which can be of benefit to the enterprise.

From the above discussion, we can say that motivation is an internal feeling which can be understood
only by manager since he is in close contact with the employees.

Needs, wants and desires are inter-related and they are the driving force to act. These needs can be
understood by the manager and he can frame motivation plans accordingly. We can say that motivation
therefore is a continuous process since motivation process is based on needs which are unlimited. The
process has to be continued throughout.

We can summarize by saying that motivation is important both to an individual and a business.
Motivation is important to an individual as:

1. Motivation will help him achieve his personal goals.

2. If an individual is motivated, he will have job satisfaction.
3. Motivation will help in self-development of individual.
4. An individual would always gain by working with a dynamic team.

Similarly, motivation is important to a business as:

1. The more motivated the employees are, the more empowered the team is.

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 2. The more is the team work and individual employee contribution, more profitable and successful
is the business.
3. During period of amendments, there will be more adaptability and creativity.
4. Motivation will lead to an optimistic and challenging attitude at work place.

Motivation and Morale - Relationship and Differences

Morale can be defined as the total satisfaction derived by an individual from his job, his work-group,
his superior, the organization he works for and the environment. It generally relates to the feeling of
individual’s comfort, happiness and satisfaction.

According to Davis, “Morale is a mental condition of groups and individuals which determines their
attitude.”

In short, morale is a fusion of employees’ attitudes, behaviors, manifestation of views and opinions -
all taken together in their work scenarios, exhibiting the employees’ feelings towards work, working
terms and relation with their employers. Morale includes employees’ attitudes on and specific reaction
to their job.

There are two states of morale:

High morale - High morale implies determination at work- an essential in achievement of

management objectives. High morale results in:

 A keen teamwork on part of the employees.

 Organizational Commitment and a sense of belongingness in the employees mind.
 Immediate conflict identification and resolution.
 Healthy and safe work environment.
 Effective communication in the organization.
 Increase in productivity.
 Greater motivation.

Low morale - Low morale has following features:

 Greater grievances and conflicts in organization.

 High rate of employee absenteeism and turnover.
 Dissatisfaction with the superiors and employers.
 Poor working conditions.
 Employees frustration.
 Decrease in productivity.
 Lack of motivation.

Though motivation and morale are closely related concepts, they are different in following ways:

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 While motivation is an internal-psychological drive of an individual which urges him to behave in
a specific manner, morale is more of a group scenario.

Higher motivation often leads to higher morale of employees, but high morale does not essentially
result in greatly motivated employees as to have a positive attitude towards all factors of work
situation may not essentially force the employees to work more efficiently.

While motivation is an individual concept, morale is a group concept. Thus, motivation takes into
consideration the individual differences among the employees, and morale of the employees can
be increased by taking those factors into consideration which influence group scenario or total
work settings.

Motivation acquires primary concern in every organization, while morale is a secondary

phenomenon because high motivation essentially leads to higher productivity while high morale
may not necessarily lead to higher productivity.

Things tied to morale are usually things that are just part of the work environment, and things tied
to motivation are tied to the performed

Theories of Motivation

Motivation is a huge field of study. Psychologists have proposed many different theories of motivation.
Some of the most famous motivational theories include the following:

1. Maslow’s Theory of Hierarchical Needs

Abraham Maslow postulated that a person will be motivated when all his needs are fulfilled. People do
not work for security or money, but they work to contribute and to use their skills. He demonstrated
this by creating a pyramid to show how people are motivated and mentioned that ONE CANNOT
ASCEND TO THE NEXT LEVEL UNLESS LOWER-LEVEL NEEDS ARE FULFILLED. The
lowest level needs in the pyramid are basic needs and unless these lower-level needs are satisfied
people do not look at working toward satisfying the upper-level needs.

Below is the hierarchy of needs:

 Physiological needs: are basic needs for survival such as air, sleep, food, water, clothing, sex,
and shelter.
 Safety needs: Protection from threats, deprivation, and other dangers (e.g., health, secure
employment, and property)
 Social (belongingness and love) needs: The need for association, affiliation, friendship, and so
on.

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  Self-esteem needs: The need for respect and recognition.
 Self-actualization needs: The opportunity for personal development, learning, and
fun/creative/challenging work. Self-actualization is the highest-level need to which a human
being can aspire.

The leader will have to understand at what level the team members are currently, and seek out to help
them to satisfy those specific needs and accordingly work to help fulfill those needs. This will help the
team members perform better and move ahead with the project. A PMP certification will help you
better understand this concept. Also, as their needs get fulfilled, the team members will start
performing, till the time they start thinking of fulfilling the next upper level of need as mentioned in
the pyramid.

2. Hertzberg’s two-factor Theory

Hertzberg classified the needs into two broad categories; namely hygiene factors and motivating
factors:

 poor hygiene factors may destroy motivation but improving them under most circumstances will
not improve team motivation
 hygiene factors only are not sufficient to motivate people, but motivator factors are also required

Herzberg’s two-factor principles

Influenced by Hygiene Improving motivator factors Influenced by motivator

Factors (Dis-satisfiers) increases job satisfaction factors (Satisfiers)

 Achievements
 Working condition
 Recognition
 Coworker relations
Improving the hygiene factors  Responsibility
 Policies & rules
decreases job dissatisfaction  Work itself
 Supervisor quality
 Personal growth

3. McClelland’s Theory of Needs

McClelland affirms that we all have three motivating drivers, which do not depend on our gender or
age. One of these drives will be dominant in our behavior. The dominant drive depends on our life
experiences.

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The three motivators are:

 Achievement: a need to accomplish and demonstrate own competence. People with a high need
for achievement prefer tasks that provide for personal responsibility and results based on their
own efforts. They also prefer quick acknowledgment of their progress.
 Affiliation: a need for love, belonging and social acceptance. People with a high need for
affiliation are motivated by being liked and accepted by others. They tend to participate in social
gatherings and may be uncomfortable with conflict.
 Power: a need for controlling own work or the work of others. People with a high need for power
desire situations in which they exercise power and influence over others. They aspire for
positions with status and authority and tend to be more concerned about their level of influence
than about effective work performance.

4. Vroom’s Theory of Expectancy

Vroom’s expectancy theory of motivation says that an individual’s motivation is affected by their
expectations about the future. In his view, an individual’s motivation is affected by –

 Expectancy: Here the belief is that increased effort will lead to increased performance i.e., if I
work harder then it will be better. This is affected by things such as:
o Having the appropriate resources available (e.g., raw materials, time)
o Having the appropriate management skills to do the job
o Having the required support to get the job done (e.g., supervisor support, or correct
information on the job)
 Instrumentality: Here the belief is that if you perform well, then the outcome will be a valuable
one for me. i.e., if I do a good job, there is something in it for me. This is affected by things such
as:
o A clear understanding of the relationship between performance and outcomes – e.g., the
rules of the reward ‘game’
o Trust in the people who will take the decisions on who gets what outcome
o Transparency in the process decides who gets what outcome
 Valence: is how much importance the individual places upon the expected outcome. For
example, if someone is motivated by money, he or she might not value offers of additional time
off.

Motivation = V * I * E

The three elements are important when choosing one element over another because they are clearly
defined:

 E>P expectancy: our assessment of the probability that our efforts will lead to the required
performance level.

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  P>O expectancy: our assessment of the probability that our successful performance will lead to
certain outcomes.

5. McGregor’s Theory X and Theory Y

Theory X and Theory Y were first explained by McGregor in his book, "The Human Side of
Enterprise," and they refer to two styles of management – authoritarian (Theory X) and participative
(Theory Y).

Theory X: Managers who accept this theory believe that if you feel that your team members dislike
their work, have little motivation, need to be watched every minute, and are incapable of being
accountable for their work, avoid responsibility and avoid work whenever possible, then you are likely
to use an authoritarian style of management. According to McGregor, this approach is very "hands-on"
and usually involves micromanaging people's work to ensure that it gets done properly.

Theory Y: Managers who accept this theory believe that if people are willing to work without
supervision, take pride in their work, see it as a challenge, and want to achieve more, they can direct
their own efforts, take ownership of their work and do it effectively by themselves. These managers
use a decentralized, participative management style.

6. Alderfer’s ERG Theory

C. P. Alderfer, an American psychologist, developed Maslow’s hierarchy of needs into a theory of his
own.

His theory suggests that there are three groups of core needs: existence (E), relatedness (R), and
growth (G). These groups are aligned with Maslow’s levels of physiological needs, social needs, and
self-actualization needs, respectively.

Existence needs concern our basic material requirements for living, which include what Maslow
categorized as physiological needs such as air, sleep, food, water, clothing, sex and shelter and safety-
related needs such as health, secure employment, and property.

Relatedness needs have to do with the importance of maintaining interpersonal relationships. These
needs are based on social interactions with others and are aligned with Maslow’s levels of
love/belonging-related needs such as friendship, family, and sexual intimacy and esteem-related needs
such as gaining the respect of others.

Growth needs describe our intrinsic desire for personal development. These needs are aligned with the
other part of Maslow’s esteem-related needs such as self-esteem, self-confidence, and achievement,
and self-actualization needs such as morality, creativity, problem-solving, and discovery.

Alderfer is of the opinion that when a certain category of needs is not being met, people will redouble
their efforts to fulfill needs in a lower category.

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Maslow’s theory is very rigid and it assumes that the needs follow a specific and orderly hierarchy and
unless a lower-level need is satisfied, an individual cannot proceed to the higher-level need i.e., an
individual remains at a particular need level until that need is satisfied.

Whereas, according to Alderfer’s theory, if a higher-level need is aggravated, an individual may revert
to increasing the satisfaction of a lower-level need. This is called the frustration-regression aspect of
ERG theory. ERG theory is very flexible as Alderfer perceived the needs as a range/variety instead of
perceiving them as a hierarchy i.e., an individual can work on growth needs even if his existence or
relatedness needs remain unsatisfied.

For e.g., when growth needs aggravate, then an individual might be motivated to accomplish the
relatedness need and if there are issues in accomplishing relatedness needs, then he might be motivated
by the existence needs. Hence in this manner, frustration or aggravation can result in regression to a
lower-level need.

Another example could be, if someone’s self-esteem is suffering, he or she will invest more effort in
the relatedness category of needs.

Implications of the ERG Theory

All managers must understand that an employee has various needs that must be satisfied at the same
time. According to the ERG theory, if the manager focuses solely on one need at a time, then this will
not effectively motivate the employee. The frustration-regression aspect of ERG Theory has an added
effect on workplace motivation. For e.g., if an employee is not provided with growth and advancement
opportunities in an organization, then he or she might revert to related needs such as socializing
needs.

To meet those socializing needs, if the environment or circumstances do not permit it, he might revert
to the need for money to fulfill those socializing needs. By the time the manager realizes and discovers
this, they will take more immediate steps to fulfill those needs which are frustrated until such time that
the employee can again pursue growth.

Conclusion

Motivation is the state of mind which pushes all human beings to perform to their highest potential,
with good spirits and a positive attitude. The various motivation theories outlined above help us to
understand what are the factors that drive motivation. It is a leader’s job to ensure that every individual
in the team and the organization is motivated, and inspired to perform better than their best. This is
neither quick nor easy, but in the long-term, the gains that are derived from happy employees far
outweigh the time and effort spent in motivating them!

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