Fundamentals of Management 101

Unit – 4
Directing
Meaning:
Directing means giving instructions, guiding, counseling, motivating and leading the staff in an
organization in doing work to achieve Organizational goals. Directing is a key managerial
function to be performed by the manager along with planning, organizing, staffing and
controlling. From top executive to supervisor performs the function of directing and it takes
place accordingly wherever superior – subordinate relations exist.Directing is a continuous
process initiated at top level and flows to the bottom through organizational hierarchy.

Direction has got following characteristics:

1. Pervasive Function- Directing is required at all levels of organization. Every manager provides
guidance and inspiration to his subordinates.
2. Continuous Activity- Direction is a continuous activity as it continuous throughout the life of
organization.
3. Human Factor- Directing function is related to subordinates and therefore it is related to
human factor. Since human factor is complex and behaviour is unpredictable, direction
function becomes important.
4. Creative Activity- Direction function helps in converting plans into performance. Without this
function, people become inactive and physical resources are meaningless.
5. Executive Function- Direction function is carried out by all managers and executives at all
levels throughout the working of an enterprise, a subordinate receives instructions from his
superior only.
6. Delegate Function- Direction is supposed to be a function dealing with human beings. Human
behaviour is unpredictable by nature and conditioning the people’s behaviour towards the
goals of the enterprise is what the executive does in this function. Therefore, it is termed as
having delicacy in it to tackle human behaviour.

Importance
1. Initiates Action: It helps to initiate action by the people in the organization towards
attainment of desired objectives. The employees start working only when they get instructions
and directions from their superiors. It is the directing function which starts actual work to
convert plans into results.
2. Integrates Employee’s Efforts: All the activities of the organization are interrelated so it is
necessary to coordinate all the activities. It integrates the activities of subordinates by
supervision, guidance and counselling.
3. Means of motivation: It motivates the subordinates to work efficiently and to contribute
their maximum efforts towards the achievement of organizational goals.
4. Facilitates change: Employees often resist changes due to fear of adverse effects on their
employment and promotion. Directing facilitates adjustment in the organization to cope with
changes in the environment.
5. Stability and balance in the organization: Managers while performing directing function
instruct, guide, supervise and inspire their subordinates in a manner that they are able to strike
a balance between individual and organizational interests.

Principles of Effective Direction:

Effective direction leads to greater contribution of subordinates to organization goals. The

directing function of management can be effective only when certain well accepted principles
are followed.

The following are the basic principles of effective direction:

1. Harmony of Objectives:
It is an essential function of management to make the people realize the objectives of the
group and direct their efforts towards the achievement of their objectives. The interest of the
group must always prevail over individual interest. The principle implies harmony of personal
interest and common interest..

2. Unity of Command:
This principle states that one person should receive orders from only one superior, in other
words, one person should be accountable to only one boss. If one person is under more than
one boss then there can be contradictory orders and the subordinate fails to understand whose
order to be followed. In the absence of unity of command, the authority is undermined,
discipline weakened, loyalty divided and confusion and delays are caused.

3. Unity of Direction:
To have effective direction, there should be one head and one plan for a group of activities
having the same objectives. In other words, each group of activities having the same objectives
must have one plan of action and must be under the control of one supervisor.

4. Direct Supervision:
The directing function of management becomes more effective if the superior maintains direct
personal contact with his subordinates. Direct supervision infuses a sense of participation
among subordinates that encourages them to put in their best to achieve the organizational
goals and develop an effective system of feed-back of information.

5. Participative or Democratic Management:

The function of directing becomes more effective if participative or democratic style of
management is followed. According to this principle, the superior must act according to the
mutual consent and the decisions reached after consulting the subordinates. It provides
necessary motivation to the workers by ensuring their participation and acceptance of work
methods.
6. Effective Communication:
To have effective direction, it is very essential to have an effective communication system
which provides for free flow of ideas, information, suggestions, complaints and grievances.

7. Follow-up:
In order to make direction effective, a manager has to continuously direct, guide, motivate and
lead his subordinates. A manager has not only to issue orders and instructions but also to
follow-up the performance so as to ensure that work is being performed as desired. He should
intelligently oversee his subordinates at work and correct them whenever they go wrong.

Techniques of Directing

There are three techniques of direction followed by the management.

They are briefly explained below:

1. Consultative Direction:

The supervisor or superior has consultation with his subordinates before issuing a
direction. The consultation is made to find out the feasibility, enforceability and nature of
problem. It does not mean that the superior is not capable of acting independently.
Ultimately, the superior has the right to take any decision and give the directions.

The co-operation of subordinates is necessary for successful implementation of any

direction. Better motivation is available to the subordinates under this direction
technique. The supervisor could instill high morale into the subordinates.

2. Free-Rein Direction:

The subordinate is encouraged to solve the problem independently under this direction
technique. The superior assigns the task generally. The subordinates should take initiative
to solve the problem. Only highly educated, efficient and sincere sub -ordinates are
required to apply these direction techniques.

3. Autocratic Direction:

This direction is just opposite to free-rein direction technique. Here, the supervisor
commands his subordinates and has close supervision. The supervisor gives clear and
precise orders to his sub-ordinates and act accordingly. There is no way left to the sub-
ordinates to show their initiatives.
Coordination
Definition: Coordination can be described as that invisible cord, which runs through all the
activities of the organization and binds them together. It is not a function of the management,
rather it is the essence of management, which is needed at all levels and at each step of the
firm, to achieve the objectives of the organization.

In basic terms, coordination means the integration and synchronization of the activities,
resources and efforts of the people working in the organization, which leads to unity of action,
in the pursuit of the organization’s objectives.

Coordination is that hidden force that links all the functions of the management,
i.e. planning, organizing, staffing, directing and controlling.

Need for Coordination

We all are aware of the fact that there are several departments in an organization, such as
Finance, Purchase, Production, Sales, Human Resource, Marketing, Research and Development
etc. and the work of all the departments are interlinked and interdependent. Further, there are
three levels in organizational hierarchy, wherein:
1. Top-level: Comprises of the Board of Directors, Chief Executives, Managing Directors, etc.
2. Middle-Level: Comprises of departmental heads and managers.
3. Lowest-Level: Comprises of supervisors, first-line managers and foreman.

Coordination is a process, which ensures that various departments, units and levels of the
organization work smoothly and continuously in tandem, i.e. in the same direction, towards the
accomplishment of organizational goals, while effectively utilizing the resources.

It aims at involving all the elements of the company, in the plan, strategy or task, to get input
from everyone and attain best results.

Coordination tends to lineup the resources, people and efforts in such a way that there is no
chaos, hustle, disorder and conflict, regarding any issue in an organization. Hence it is not
wrong to say “With coordination comes harmony in the performance of organizational tasks”.
 Characteristics of Coordination

The salient features of coordination are given as under:

 Integrates efforts of employees: Coordination integrates the efforts of the employees, to

translate it into a determined activity. It aims at giving a specific direction to the group, to make
sure that the results obtained are according to the plans.
 Unity of Action: There must be a unity of action in the accomplishment of organization’s
objectives. It is that implicit force which binds various departments, divisions and units of the
concern, and ensures that they work with a single focus.
 Ongoing process: Coordination begins at the very first stage of planning, thereafter
organizational hierarchy is defined keeping the company’s plans in mind. Then, the staff is hired
according to the company’s plans and hierarchy, and work is assigned to them
accordingly.Thereafter, the direction is given to the employees as per the company’s plans and
policies. Lastly, if there are any discrepancies from the plans, they are corrected, at the
controlling stage.So, we can say that coordination is implied in all the functions of the
management, which keeps on continuing.
 Pervasive Function: Coordination is a must for all the three levels of the management as are
interlinked and interdependent with respect to the functions performed by these levels.
 Deliberate activity: Various activities and efforts of the organization are to be coordinated in a
thoughtful and careful manner.
If there is no coordination among the various activities, then the efforts of the employees are
wasted even if they cooperate. Further, in the absence of cooperation, coordination may not
work effectively and leads to dissatisfaction. So, cooperation and coordination should go hand
in hand.
 Importance of Coordination

The importance of coordination is discussed below:

1. Growth of organization: As time passes, organization grows in size, resulting in an increased

volume of work. There will be numerous employees to handle the work, which are hired for
different departments. At times, the departmental goals are considered more important by
them, as compared to the overall goal of the concern.So, coordination of activities, is useful in
unifying all the people together, to focus on just one ultimate goal.
2. Locational differences: Big corporations are located at different locations, even in different
countries, which does not allow people to meet and communicate frequently. In the absence of
it, coordination helps in keeping all the units and offices, together, to work in sync.
3. Diversification of business: When a company decides to diversify its business, by entering into
new markets with a new product, the company starts new divisions or ventures, to undertake
the activities. Then also coordination plays a critical role, in reconciling the goals of the
organization.
4. Specialisation: In specialization, tasks are assigned to the employees as per their expertise or
specialization in the specific field. Coordination helps in bringing together all the talented and
experienced employees together, to maintain a harmonious relationship between various
groups.
5. Synergy: It is a universal fact that the combined effort of two people is always greater than
those working separately. So, coordination combines the efforts of the firm which helps in
achieving synergy.
Coordination keeps a balance in all the activities by ensuring the appropriate allocation of tasks
to suitable persons, to realize the organization’s objectives successfully.

Techniques of Coordination:
The following measures or techniques have to be adopted in practice as tools for securing

better co-ordination in the working of an organisation:

1. Simplified Organisation:

In large organisations, there is a tendency towards over- specialisation. The organisation gets

divided into a whole series of units each one of which concentrates just on its own task. In fact,

each unit tends to be bureaucratic and its activities become ends in themselves instead of

being means to the overall ends of the organisation.

This creates problems of co-ordination. The remedy for this lies in placing the closely-related

functions and operations under the charge of an executive who functions as a coordinator. Re-

arrangement of departments may also be considered to bring about a greater deal of harmony

among the various wings of the organisation.

Furthermore, clear-cut organisation structure and procedures that are well-known to all

concerned will ensure co-ordination. Organisational procedures should cover all activities and

each person must be given to understand what he is responsible for and how his work is

related to that of other individuals.

2. Harmonized Programmes and Policies:

The ideal time to bring about co-ordination is at the planning stage. The plans prepared by

different individuals or divisions should be checked up to ensure that they all fit together into

an integrated and balanced whole. The coordinating executive must ensure that all the plans

add up to a unified programme.

Moreover, co-ordinated activities must not only be consistent with each other, but also be

performed at the proper time.

3. Well-designed Methods of Communication:

Good communication brings about proper co-ordination and helps the members of a business

organisation to work together. Flow of communication in all directions will facilitate co-

ordination and smooth working of the enterprise. The use of formal tools like orders, reports

and working papers, and informal devices like the grapevine will provide adequate information

to all concerned.

Continuous, clear and meaningful communication provides every member with a clear
understanding of the nature and scope of his work as well as that of other persons whose

responsibilities are related to him. This aids the executives in coordinating the efforts of the

members of their teams.

4. Special Coordinators:

Generally, in big organisations, special coordinators are appointed. They normally work in staff

capacity to facilitate the working of the main managers. A co-ordination cell may also be

created. The basic responsibility of the cell is to collect the relevant information and to send

this to various heads of sections or departments so that inter-departmental work and

relationship are co-ordinated.

5. Co-ordination by Committees:

Co-ordination in management by committees is achieved through meetings and conferences.

Sometimes different committees are appointed to look after different areas of management,

namely, Purchase Committee, Production Committee, Sales Committee, Finance Committee,

etc. These committees take the group decision by exchanging their views and ideas and so it

has coordinating elements.

6. Group Discussion:

Group discussion is the other tool for co-ordination. It provides opportunities for free and
opens exchange of views and inter-change of ideas, problems, proposals and solutions. Face-to-
face communication enables the members to attain improved understanding of organisation-

wide matters and leads to better co-ordination.

7. Voluntary Co-ordination:

In ideal conditions, co-ordination should take place through voluntary co-operation of the

members. The basic principle of voluntary coordination is the modification of functioning of a

department in such a way that each department co-ordinates with other departments.

Each department or section or individual affects others and is also affected by others.

Therefore, if those departments, sections or individuals apply a method of working which

facilitates others, voluntary co-ordination is achieved. This can be done by horizontal

communication.

8. Co-ordination through Supervision:

The supervising executives have an important part to play in coordinating the work of their

subordinates. Where the work-load of an executive is so heavy that he cannot find adequate

time for co-ordination, staff assistants may be employed. They may recommend to the senior

official the action that he may take for ensuring co-ordination.

The cardinal principle involved in co-ordination is the balancing and keeping together the
different activities for a well-knit aggregate function, and its effectiveness depends upon

satisfactory delegation of authority, sharing of responsibilities and accountability, and proper

supervision—keeping in view the oneness of the organisation.

(i) Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
(ii) 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.
(iii) Leadership- may be defined as a process by which manager guides and influences the work
of subordinates in desired direction.
(iv) Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.

1. Supervision, as an element of directing:

process of guiding the efforts of employees and other resources to accomplish desired
objectives. Overseeing people at work Involves instructing, observing, monitoring and
guiding employees.

Carried out at all levels but more important at the lower levels therefore the term ‘Supervisor’is
used at the operatives level of management

I. Importance of Supervision/Role of Supervisor/Functions

1. Link between workers and management because the supervisor explains management
policies to workers and brings workers problems to the notice of the management.

2. Ensures issuing Instructions: To make sure that the instructions are communicated to each
and every employee.

3. Facilities Control: Control means match between actual and planned output. It ensures
checking on the methods in use and progress of work according to planned schedule.

4. Maintenance of discipline: The strict supervision and guidance of supervisor encourages the
employees and workers to be more disciplined in the activities.
Under the guidance of superior the workers follow a fixed or strict timetable and execute the
plans in right directions.

5. Feedback: The supervisors are directly dealing with the subordinates. As a result, feedback in
the form of suggestions, grievances keep coming to the management. It improves quality
management decisions and revision of plans & policies.

6. Improved Motivation: A supervisor with good leadership qualities can build up high morale
among workers. The relationship with the supervisor is a very good incentive to improve the
motivation level of the employees while guiding the employees, the supervisors encourage the
subordinates to perform to their best capacities.

7. Optimum utilization of resources: All the activities are under the observation of supervisor so
less wastage and optimum utilization of resources is possible.

Difference Between Direction And Supervision

The major dissimilarities or difference between direction and supervision can be pointed out as
follows:

1. Introduction

Direction: A process which includes instructing, guiding, ordering and leading subordinates and
influencing them towards the attainment of objectives of the organization.

Supervision: It is an act of overseeing, monitoring or observing the performance of

subordinates and progress of their tasks.

2. Nature

Direction: It is a goal oriented process

Supervision: It is task oriented activity

3. Scope

Direction: Scope of direction is broader than the scope of supervision because it includes
several managerial functions such as coordination, motivation, supervision etc.

Supervision: Its scope is limited because it is only a component of direction.

4. Level Of Management

Direction: It is performed by the top level management

Supervision: It is performed by middle and lower level of management

5. Power

Direction: Directors have decision making power

Supervision: Supervisors do not have decision making power

6. Face-To-Face Contact

Direction: Direction may take place with or without direct contact between superiors and
subordinates. So, face-to-face contact is not compulsory.

Supervision: Supervision is not possible without direct contact between supervisors and
employees. So, face-to-face contact is necessary.

Basis Direction Supervision

Introduction Process of guiding, Act of monitoring and

ordering and influencing observing the performance of
others to achieve goals. others

Nature Goal-oriented Task-oriented

Scope Broader Limited

Decision Making Yes No

Power

Level Of Management Top Level Middle And Lower Level

Face-to-face Contact Not compulsory Compulsory

II. Motivation

Meaning:

i. Incitement or inducement to act/move.

ii. Process of stimulating people to action to accomplish desired goals.

• Three key terms = motive, motivation, motivators

Motive :inner state that energizes, activates and directs behaviour towards goals.

Arises out of unsatisfied needs = causes restlessness.

Motivation : Process of stimulating people to action + Depend on satisfying needs of people.

Motivators: Technique used to motivate people.Egs. = pay, bonus, promotion, recognition

etc.

Features

1. Psychological Phenomenon: Motivation is an internal feeling which means it cannot be

forced on employees. The internal feeling such as need, desire, aspiration etc. influence human
behaviour to behave in a particular manner.

2. Goal Directed Behaviour: It induces people to behave in such a manner so that they can
achieve their goals. A motivated person works towards the achievement of desired goals.

3. Motivation can be either positive or Negative: Positive motivation means inspiring people to
work better and appreciating a work that is well done e.g., pay increase promotion recognition.
Negative motivation means forcing people to work by threatening or punishing them. e.g.,
issue of memo, demotion, stopping increments etc.

4.Complex Process: It is a complex and difficult process. Individuals differ in their needs and
wants and moreover human needs change from time to time.

5. Continuous Process: Human needs are unlimited and so they keep on changing continuously,
satisfaction of one need gives rise to another. As soon as one need is satisfied another need
arises. So managers have to continuously perform the function of motivation.
 Theories of Motivation
Understanding Theories of Motivation and types of motivational theories, what are the types of
content motivational theories and process motivational theories, and the difference between
the two.

 Content Motivation Theories

 Process Motivation Theories
The word ‘Motivation’ is derived from the Latin word movere, meaning “to move”. It is referred
to as a combination of motive and action. Theories of motivation or motivation theory are the
study of understanding what drives a person to work for achieving a particular goal or
outcome. There are two types of motivational theories:

1. Content motivation theories

2. Process motivation theories

Content Motivation Theories

The content motivation theories are the motivational theories that concentrate on WHAT
motivates people and it is related to the individual needs and goals.

A few main content theories are:

 Maslow’s needs hierarchy,

 Alderfer’s ERG theory,
 McClelland’s achievement motivation and
 Herzberg’s two-factor theory

Maslow’s Motivation Theory

One of the earliest or most widely known theories of motivation is Maslow – hierarchy of
needs, and it was developed in the 1940s and 1950s by Abraham Maslow.

The theory consists of five basic hierarchies. The arrangement of this hierarchy is in the
following manner:

1. Self-Actualization
2. Esteem Needs
3. Belongingness and love needs
4. Safety Needs
5. Physiological Needs

These five different hierarchies were further categorized into three categories:

 Self-fulfillment
 Psychological Needs
 Basic Needs

Self Actualization

Self-actualization is the hierarchy that tells us about the desire of an individual to grow and
develop to his/her full potential. This hierarchy falls in the category of self-fulfillment needs.

Esteem Needs

Esteem is the second level hierarchy of Maslow’s motivation theories, which tells us about the
desire of a person for the need of respect. The meaning of Esteem is to be valued, respected,
and appreciated by others. This hierarchy falls in the category of psychological needs.

Belongingness and love needs

Belongingness and love is the third level of hierarchy which tells us about the need of a person
to integrate into social groups, feel part of a community, and be loved. It is believed that
people need to belong and be accepted among their social groups. This hierarchy falls in the
category of psychological needs.

Safety and Security

This hierarchy of safety and security tells us about the basic needs of a human which are a
secure source of income, a place to live, health, and well-being. There is the most basic
motivation for a human to be motivated therefore, falls in the category of basic needs. And
once these needs of a human being are fulfilled then only a person can think about the other
two needs: Self-fulfillment and Psychological Needs.

Physiological Needs

This hierarchy level of physiological needs is the most basic needs for humans to survive, such
as air, water, and food. Without all of the three basic physiological needs, our body and mind
cannot function well, therefore, this level of hierarchy also falls in the category of basic needs.
Maslow‟s Hierarchy Of Needs:
Maslow‘s need hierarchy is considered to be fundamental to the understanding of motivation
and plays an important role in motivation.

• People have a wide range of needs like physiological needs, social needs, safety needs,
esteem needs and self actualisation needs which motivate them to work.

• The manager must understand the needs and wants of people in order to motivate them and
improve their performance levels.

• For the satisfaction of these needs, managers must offer different incentives (monetary and
non-monetary).

Management Can Satisfy

Examples Of Need (Individual
NEED This Need By (Organizational
Example)
Example)

Offer monetary incentives

Most basic in the hierarchy and
e.g. Good salary/wages and
1. Basic Physiological Needs corresponds to primary needs.
comfortable working
Hunger, thirst, shelter, sleep.
conditions

Security and protection from

Offer job security, pension,
2. Safety/Security Needs physical and emotional harm,
insurance etc
stability of Income etc.

The firm can encourage

team building and permit
Refer to affection, sense of
3. Affiliation/Belonging the workers to opportunity
belongingness, acceptance and
Needs to interact socially and so
friendship
develop cordial relations
with colleagues

Recognize good
performance, provide
Include factors such as self-
opportunity for employees
4. Esteem Needs respect, autonomy status,
to feel a sense of
recognition and attention
accomplishment, provide
important job titles etc

Offer the freedom to take

The drive to become what one is
decisions, providing them
capable of becoming. These
with opportunity to learn
5. Self Actualisation Needs needs include growth, self-
things, encouraging
fulfillment and achievement of
creativity, leading to
goals.
achievement of goals etc.
 Financial and Non-Financial Incentives: Incentive means all measures which are used to
motivate people to improve performance.

Financial incentives = directly in money form or Non-financial incentives= main emphasis is to

measurable in monetary terms. provide psychological and emotional
1. Pay and allowance satisfaction. Not measurable in monetary
terms. 1. Status
2. Organizational climate
2. Productivity linked incentive schemes
3. Career advancement opportunities
3. Bonus
4. Job enrichment
4. Profit sharing
5. Employee recognition programmes
5. Co-partnership/Stock options
6. Job security
6. Retirement benefits
7. Employee participation 8. Employee
7. Perquisites empowerment

McClelland’s Motivation Theory

McClelland’s achievement motivation was developed in the early 1960s when McClelland built
Maslow’s work, which describes three human motivators. McClelland’s achievement
motivation is also known as ‘Learned Need Theory’.

McClelland’s theory differs from Maslow’s and Alderfer’s, as its focuses on satisfying the
existing needs of a person, rather than focusing on the development of new needs. These
dominant motivators depend on our culture and life experiences, and are permanent. These
motivators are:

 Affiliation
 Achievement
 Power
 Herzberg’s Two Factor Theory

Herzberg’s Two Factor Theory is also known as motivation-hygiene theory. According to

Herzberg’s Theory, there are some factors known as the motivating factors that cause job
motivation, while some other factors known as the hygiene factors cause dissatisfaction.

Motivating factors (Herzberg’s five factors of job satisfaction):

 Achievement
 Recognition
 Work itself
 Responsibility
 Advancement

These are the only five factors that motivate a person and make him satisfied with his job.
Although motivating factors cause job satisfaction, at the same time we need the lack of
dissatisfaction to achieve more productive work.

Hygiene factors (Herzberg’s five factors of job dissatisfaction or deficiency of needs):

 Company policy and administration

 Supervision
 Salary
 Interpersonal relationships
 Working conditions

Process Motivation Theories

The process motivation theories are the motivational theories that concentrate on HOW to
motivate people. A few main process motivation theories are:

 Skinner’s reinforcement theory,

 Victor Vroom’s expectancy theory,
 Adam’s equity theory and
 Locke’s goal-setting theory

Skinner’s reinforcement theory

Skinner’s reinforcement theory or the reinforcement theory is based on Skinner’s operant

conditioning theory, which states that behavior can be formed by its consequences(Gordon,
1987).
 Positive Reinforcement

Positive reinforcement motivates a person to get anticipated reinforcement of required

behavior. A few of the examples of Positive reinforcement are appreciation, certification,
money, trophy, etc.

Negative Reinforcement

Negative reinforcement causes the elimination of the unpleasant state.

Undesired Reinforcement

Punishment can be the undesired reinforcement or reinforce undesired behavior.

According to Skinner’s reinforcement theory, positive reinforcement is a better and improved

motivational technique than punishment because:

1. Punishment does not give an alternative to undesirable motivation, it just tries to stop the
undesirable motivation.
2. Punishment creates negative attitudes and bad feelings towards the person and work.
3. Also, punishment just tries to avoid the bad behavior but does not give a permanent solution to
the problem.

Victor Vroom’s Expectancy Theory

Victor Vroom’s expectancy theory aims to explain how people choose from the actions that are
available to them. According to the theory, motivation is defined as the process that controls
our choices among the other available forms of voluntary behavior.

The motivation to be involved in an activity is found by appraising three factors, that are:

 Expectancy: It is a common belief that more effort results in success, therefore, a person
expects that if he is working hard then he/she expects to be appreciated or appraised.
 Instrumentality: The belief within the person that there is a connection between activity and
goal, therefore, if you perform well, you will get the reward.
 Valence: The value of a reward for a person as a result of his success.

Adam’s Equity Theory

Adam’s equity theory is based on the social exchange theory and was suggested by
Adams(1965). The equity theory states that a person is motivated, if they are treated equitably,
and receive what they consider fair for their effort and cost.
Locke’s Goal-setting Theory

Locke’s goal-setting theory is an integrative model of motivation same as the expectancy

theory. It focuses on setting specific and challenging goals and then commitment to these goals
are key determinants of motivation. Goals described the desired future and established goals
that can drive the behavior of the person.

Conclusion

Motivation helps a person to achieve their set goals and it is the key reason which helps a
person to be a better person. Motivation theory is the study of understanding what drives a
person to work for achieving a particular goal or outcome. There are two types of motivation
theories: Content motivation theories which focus on WHAT while Process motivation theories
focus on HOW.

III. Leadership
Leadership is the activity of influencing people to strive willingly for mutual objectives.
Managers at all levels are expected to be the leaders of their subordinates. Leadership
indicates the ability of an individual to maintain good interpersonal relations with followers and
motivate them to contribute for achieving organizational objectives. It is a process of
interaction between the leader and his followers. It helps in persuading employees to work
cooperatively and enthusiastically towards common goals.

Importance of Leadership:
1. Makes people contribute positively:

• Influences behaviour and makes people contribute positively and produce good results.

2. Creates congenial work environment:

• Maintains personal relations, helps followers fulfil their needs+ provides confidence, support
and encouragement.

3. Introduces change:

• Persuades, clarifies and inspires people to accept changes.

• So overcomes resistance to change with minimum discontent..

4. Handles conflict
• Does not allow adverse effects .

• Allows followers to express their feelings and disagreements and gives suitable clarifications.

5. Trains subordinates:

• Builds up successors and helps in smooth succession process.

Qualities Of A Good Leader:

1. Physical features – appearance, personality, heath and endurance inspires followers to work
with the same tempo.
2. Knowledge – knowledge and competence to instruct and influence subordinates.
3. Integrity – the leader should be a role model regarding ethics, values, integrity and honesty.
4. Initiative – grab opportunities instead of waiting for them.
5. Communication – capacity to explain his ideas and also be a good listener, teacher, counselor
and persuader.
6. Motivation skills – understand followers needs and devise suitable means to satisfy them. 7.
Self-confidence – so that he can provide confidence to followers
8. Decisiveness – should be firm and not change opinions frequently
9. Social skills – sociable, friendly and maintain good relations with followers.

Styles of Leadership
Leadership styles refer to a leader’s behaviour. Behavioural pattern which the leader reflects in
his role as a leader is often described as the style of leadership.

A Leadership style is the result of the leader’s philosophy, personality, experience and value
system. It also depends upon the type of followers and the atmosphere revealing in the
organization.

Different types of leadership style are:

1. Autocratic leadership
2. Participative leadership/Democratic
3. Free rein leadership/Laissez Faire

A leader may use all styles over a period of time but one style tends to predominate as his
normal way of using power.

l. Autocratic or Authoritarian Leader

An autocratic leader gives orders and insists that they are obeyed. He determines the policies
for the group without consulting them. He does not give information about future plans but
simply tells the group what immediate steps they must take. Under this style, all decision
making power is centralized in the leader. He does not give the subordinates any freedom to
influence his decisions.
It is like “bossing people around.” This style should normally be used on rare occasion.

It is best applied to situations where there is little time for group decision making or where the
leader is the most knowledgeable member of the group.

2. Democratic or Participative Leader

A democratic leader gives order only after consulting the group and works out the policies with
the acceptance of the group.

He never asks people to do things without working out the long term plans on which they are
working. He favours decision making by the group as shown in the diagram.

This improves the attitude of the employees towards their jobs and the organization thereby
increasing their morale. Using this style is of mutual benefit – it allows them (subordinates) to
become part of the team and helps leaders (seniors) to make better decisions.

When should Participative/democratic leadership be applied?

It works best in situations where group members are skilled and eager to share their
knowledge.

It is also important to have plenty of time to allow people to contribute, develop a plan and
then vote on the best course of action.

This style should NOT he used when:

In situations where roles are unclear or time is of the essence, democratic leadership can lead
to communication failures and incomplete projects.

3. Laissez Faire or Free Rein Leader

A free rein leader gives complete freedom to the subordinates. Such a leader avoids use of
power. He depends largely upon the group to establish its own goals and work out its own
 problems. Group members work themselves as per their own choice and competence. The
leader exists as a contact man with the outsiders to bring information and the resources which
the group requires for accomplishing the job. Note: This is also known as laissez faire which
means no interference in the affairs of others. [French laissez means to let/allow fair means to
do].

Types of leadership theories

There are seven main leadership theories regarding the ability and the characteristics of a good
and successful leader. Depending on different situations and scenarios, the significance of
these theories is changed.

 Great Man theories of leadership

Great man theory of leadership is the most prior theory of leadership. This theory of leadership
says that leaders are born and not made. A leader is a leader by birth. The person, who has the
ability to lead in every aspect of his life from his birth. A leader possesses the quality of
leadership, and the one who does not possess it can not be a leader. According to this theory of
leadership, successful leaders are born with all the necessary qualities of leadership such as
positivity, confidence, responsibility, strategic thinking etc.

 Contingency theories of leadership

The contingency theories of leadership give importance to the situation at which leadership
quality is required. The leader should choose the optimum action in the different situations,
which describe the leadership quality of the leader. According to the contingency theories of
leadership, the best style of leadership is changed with the different variables with respect to
the environment.

 Transformational theories of leadership

The transformational theories of leadership are focused between the leader of the organisation
and the member of that organisation. A good leader is described with how he changes and
transforms the members of the organisation to do the task better. According to the
transformational or relationship theories of leadership, the leaders help every member of the
 organisation to grow. The leader must possess the qualities of task management and team
management.

 Trait theories of leadership

The trait theories of leadership are similar to the Great man theory which gives importance to
the build quality of the person and says that the leader is born with not made. The qualities of
the person lead a person to take certain actions in a different situation. This theory states that
a person has traits that are required to be a leader such as a high confidence level, the courage
to take initiative etc.

 Behaviour theories of leadership

The behaviour theories of leadership are somewhere between the Great man theory of
leadership and contingency theory of leadership. This theory tails that a leader is defined by his
behaviour while performing a task or leading the members. According to the behaviour theory,
a person keeps learning new qualities of leadership from the action and present them in his
behaviour in order to be a great leader.

 Transactional theories of leadership

Transactional theories of leadership are the theory is based on the motivation of the members
of the organisation. These members can not be self-motivated, and it is the primary work of a
leader to motivate them. A good leader motivates the members of the organisation by leading
from the front and setting up examples.

 Situational theories of leadership

The situational theories of leadership are similar to the contingency theory, which gives
importance to the situation at which the leadership quality is required rather than the
individual personality. A leader is judged in different situations by the action taken by him. A
good leader is expected to take the optimum action in different problems.

Communication
It is transfer of information from the sender to the receiver with the information being
understood by the receiver. Communication plays key role in the success of a manager.
Directing abilities of manager mainly depend upon his communication skills. That is why
organization always emphasizes on improving communication skills of managers as well as
employees. Communication is important for the directing function because all other elements
of directing become possible only when there is adequate communication.
Elements of Communication Process
1. Sender: Who conveys his thoughts or ideas.

2. Message: Ideas, feelings, suggestions, order etc.

3. Encoding: Converting the message into communication symbols such as words/pictures etc.

4. Media: Path/Channel through which encoded message is transmitted to receiver e.g., face to
face, phone call, internet etc.

5. Decoding: Converting encoded symbols of the sender.

6. Receiver: Who receives communication of the sender.

7. Feedback: All those actions of receiver indicating that he has received and understood the
message of the sender.

8. Noise: Some obstruction or hindrance to communication like poor telephone connection,

inattentive receiver.

Importance of Communication
1. Facilitates Coordination: between interrelated departments and sections thus creating a
unity of purpose and action.

2. Provides data necessary for decision makings: When information is effectively and efficiently
communicated to management.

3. Increases managerial efficiency: Every individual in the organization is assigned a job or task.
The employee must know clearly who has to report to whom, what part of total job they are
expected to perform and what are their decisions. The clarity comes only with smooth flow of
communication which keeps the organization at work with efficiency.

4. Promotes cooperation and Industrial Peace: The two-way communication promotes

cooperation and mutual understanding between the management and workers and brings
peace in the organization.

5. Establishes effective leadership: Effective communication helps to influence subordinates.

While influencing, a leader should possess good communication skills.

If there is two-way information flow between the superior and subordinates then there will be
positive reaction of employees.

Communication taking place within an organization may be broadly classified into two
categories.
 Informal Communication:
1.Takes place outside the official
Formal communication
channels –
1.Official communication following the chain of command

2. May be work related or other

2.Is concerned with official matters
matters –

3. May be written/oral but generally recorded and filed.

3.Arises out of social interactions –

4.Directions =
4.Grapevine:

 Vertical:
 Origin and direction of flow is
1. Downward-superior to subordinates –sending notices,
not easily located
passing guidelines, asking them to complete assigned
 Cuts across scalar chain
work.
 Spread of rumors is possible
2. upward- subordinates to superior – application for
as it is not easy to fix
leave, submission of reports.
responsibilities –
 Horizontal- between departments – about schedule of
5.Types =
product delivery, product design etc.
5.Popular communication networks are:
 single strand,
 gossip,
 Single chain, Wheel, Circular, Free flow and Inverted V
 probability network,
 clusters
Difference between Formal and Informal Communication

Basis Formal Communication Informal communication

Between individuals and groups are

1. Meaning Follows the official chain of command.
not officially recognized.

2. Channel Through a definite path. No definite path.

Slow: because all information has to pass through Very fast-Cuts across all the official
3. Speed
an established scalar chain. channels.

Flexible and varies from individual

4. Nature More rigid and cannot be modified.
to individual.

5.
It is mostly expressed in the written form. It mostly tends to be oral.
Expression
Barriers to Effective Communication

Semantic Barriers:

Concerned with problems and obstructions in the process of encoding or decoding of message
into words or impressions. Semantic barriers are as follows:

1. Badly expressed message: Sometimes intended meaning may not be conveyed.

2. Words with different meanings confuses the receiver.
3. Faulty translations may transfer wrong messages.
4. Unclarified assumption: Different interpretations may result in confusion.
5. Technical Jargon: Technical words may not be understood by the workers.

Psychological/Emotional barriers

1. Premature evaluation- judgement before listening leads to misunderstanding.

2. Lack of attention/poor listening may disappoint the employees.
3. Loss by transmission and poor retention: When oral communication passes through various
levels it destroys the structure of the message or leads to transmission of inaccurate message.
4. Distrust: If the parties do not believe each other. They cannot understand each other’s
message in its original sense.

Organizational Barriers

Factors related to organization structure:

1. If organizational policy does not support free flow of information it creates problem.
2. Rules and regulations: Rigid rules and regulations may lead to red tapism and delay of action.
3. Status conscious managers may not allow subordinates to express their feelings freely.
4. Complexity in organization structure results in delay and distortion.

Personal Barriers: of superiors and subordinates.

1. Fear of challenge to authority may withhold or suppress a particular communication.

2. Lack of confidence of superior in his subordinates.
3. Unwillingness to communicate. e.g., fear of punishment/demotion.
4. Lack of proper incentives stops the subordinates to offer useful suggestions.

Improving Communication Effectiveness

1. Clarify the ideas before communication.

2. Communicate according to the needs of receiver.
3. Consult others before communicating.
4. Be aware of language, tone and content of message.
5. Ensure proper feedback. Feedback provides opportunity for suggestions and criticism.
6. Follow up communication helps to remove hurdles, misunderstanding of information given
by managers to subordination.
7. Be a good listener.