Management Functions Explained

Prepared by M. Umrez, Assistant Professor, Department of MBA, SREC, Nandyal Page 1
UNIT-1
INTRODUCTION TO MANAGEMENT
Definition of Management- Function of Management- Management as a Science and Art-Management as a Profession- Universality of
Management- Henri Faylo’s Administrative Theory –Elton Mayo’s Human Relations Movement- Systems theory – Contingency theory- Monetary
and non-monetary incentives to motivate work teams- Leadership –Definition- Qualities of successful leaders- Different leadership styles.
MANAGEMENT:
In the present society some of the organizations will have
tremendous growth within a short period of time and whereas many of
the organizations are struggling for their growth and survival from a
long period of time. Some of the companies are providing effective
compensation policies than the others in the same industry, affected
by same internal and external factors. The reason behind this will
depends on the effectiveness of management. Thus, the success or
failure of an organization will depend on its management.
The word “Management” has derived from the old French
word menagement, which means “ the art of conducting and
directing”. It also relates to the Latin word manuagere meaning to
“lead by the hand”.
Management can be defined in many ways such as:
Ivancerich, Donnelly and Gibson, define management as “the process
undertaken by one or more persons to coordinate the activities of
others persons to achieve results not attainable by any one individual
alone”.
According to John A. Pearce and Richard B. Robinson management
can be defined as “the process of optimizing human, material and
financial contributions for the achievement of organizational goals”.
In simple words management can be defined as “things done by
others”.
NATURE OF MANAGEMENT:
As blood, soul & mind are important for the life, same as
management is for business. Someone has written, "Management is
the soul of Industrial development." The progress and prosperity of
business organization is based on management. It is the brain of an

organization, without management nothing can be done in the
business.
i. Management is universal:
Management is taken as universal activity whether an organization is
big or small, government, hospitals, schools, colleges, etc.
management is needed. Wherever there is a human activity there is
management. Every step of life requires management because with
the help of management each & every task can be handled easily,
properly & effectively.
ii. Management, social process:
Management involves dealing with the people, the effort of human
beings are controlled & directed by the management. It has social
obligation to make efficient use of scare material for the benefit of the
society.
iii. Goal oriented:
Effective management is always management by objectives and also
it has no justification to exist without goals. An efficient and good
management tries to achieve the predetermined goals by the minimum
resources. Management is established only to achieve the goal. Hence,
it is goal oriented.
iv. Science & Art:
Management is both science and art. It is based on some skills;
knowledge is also required to achieve the goals effectively. So, it is
concerned with art tough it is not exactly like music or dance.
v. Group Effort:
It deals with group of activities because no individual can do all the
activities at the same time. So, it is based on group efforts. It is also
used to achieve the common goals with group efforts. A group also
can achieve the predetermined goals easily and effectively.
vi. Intangible:
It is important but unseen process of the organization. We can only
feel it. It cannot be seen functioning with eyes but can feel by
observing the result.
vii. Required at all level:
It is one of such process which requires all level, top level, middle
level & low level of an organization. According to levels the process
of management is different.
viii. Separate from ownership:
Management & ownership are two different things in a company. In a
company, shareholders are the owner and managerial work is in the
hand of 'Board of Directors'.
ix. Purposeful activity:

The activity of management is connected with planning, direction,
controlling, staffing, etc. and also there is some purpose behind it. Its
main aim is to achieve the economic and social objective. Without
any purpose management cannot be formed.
IMPORTANCE OF MANAGEMENT:
Management is universal and pervasive because of its significance
such as:
i. Providing managers with useful insight into reality:
Management principles act as guidelines for the managers. These
principles improve knowledge, ability and understanding of managers
under various managerial situations. The effects of these principles
help the managers to learn from their mistakes. These principles guide
managers to take right decision at the right time.
ii. Optimum utilization of resources:
The management principles insist on planned activities and systematic
organization of men and materials in the organization. Principles are
designed to get maximum benefits from the human efforts and other
resources. For example, scientific principles suggest to cut down the
wasteful movements and setting up of standard time to complete a
task. By saving time, energy and efforts activities can be made
economical and result in maximum utilization of resources.
iii. Scientific decisions:
Managers have to take number of decisions every day. So they need
to assess the resources of organizations very carefully so that the
appropriate decision can be taken by using the available resources in
best possible manner. The management principles enable the
managers to approach various problems systematically and
scientifically For example, Taylor’s principles always insisted on
replacement of rule of thumb by scientific approach i.e., he suggested
to conduct the time study to set up the standard time required to
perform a job rather than leaving it at the discretion or will of
manager.
iv. Meeting changing environment requirement:
Every businessman has to make changes in the organization according
to changes taking place in the business environment. Management
principles train the managers in implementing the changes in right
direction and at right level in the organization. Although management
principles are relative and general guidelines yet by modifying these
principles changes can be made in the organization.
v. Effective administration:
Administration is the function of top level management. In this
function major plans and policies are formed. The management
principles act as guidelines and base to form various administrative

policies to have systematic working in the organization. Management
principles make administration more effective by discouraging
personal prejudices and biases. These principles insist on objectivity
and scientific decisions. For example, principle of unity of command,
scalar chain, and unity of direction leads to systematic and smooth
functioning of the organization as unity of command avoids confusion
of more bosses. Unity of direction unifies the efforts of all the
employees in common direction and scalar chain results in systematic
flow of information. So all these principles definitely bring effective
and efficient administration.
vi. Fulfilling Social responsibilities:
A business is creation of society and makes use of resources of
society so it must do something for society also by performing some
social responsibilities. Management principles not only act as
guidelines for achieving organizational objectives but these principles
also guide the managers to perform social responsibilities. For
example, the principle of fair remuneration insists on adequate salary
to employees and takes care of interest of employees also.
vii. Management Training, Education and Research:
The management principles stress on scientific judgments and logical
thinking. As a result these principles act as base of doing research and
development in management studies. As these principles provide
organized body of knowledge to perform research work and generate
more and more knowledge, they have provided new ideas,
imagination and base for research and development.
MANAGEMENT FUNCTIONS:
The primary functions of management include:
i. Planning
ii. Organizing
iii. Staffing
iv. Directing
v. Controlling
Controlling function comprises of coordinating, reporting and
budgeting. Based on this the functions of management can be coined
the word “POSDCORB”, which represents seven functions of
management.
i. Planning: planning is a continuous and future oriented process
which represents selecting the best course of action. An effective
planning programme is affected by both external and internal
factors. The external factors include scarcity of resources (
capital, material, human), economic changes, technical changes,
political etc. whereas the internal factors includes changes in
workforce, organization structure, diversification etc.

ii. Organizing: organizing requires a formal structure of flow of
authorities and direction in order to coordinate all the activities to
achieve the prescribed objectives. Thus, the function of organizing
concerned with:
 Identifying the tasks that must be performed and grouping
them whenever necessary
 Assigning these tasks to the personnel and defining their
authority and responsibility
 Delegating the authority to the employees
 Establishing a relationship between authority and
responsibility
 Coordinating these activities.
iii. Staffing: It is a function of hiring and retaining a suitable
workforce at managerial and non-managerial levels. The sub
functions of staffing are recruiting, training, developing,
compensating, appraising, maintaining, motivating etc. This
function is most important and critical since the individuals differ
in their intelligence, knowledge, skills, experience, physical
condition, age , attitude etc.
iv. Directing: It includes instructing and guiding the subordinates
about the procedures and methods. It concerned with leadership,
communication, motivation, supervision etc.
v. Controlling: the function of control consists of those activities
that are undertaken to ensure that the events do not deviate from
the pre-arranged plans. Thus, controlling can be defined as the
minimizing the gap between the expected and standard
performance. The activities include to control are:
 Establishing the standard performance.
 Measuring performance and comparing with standard
performance
 Taking corrective actions.
MANAGEMENT AS A SCIENCE:
Science is a systematic body of knowledge that represents the general
facts which explains a phenomenon. It establishes cause and effect
relationship between two or more variables and underlines the
principles governing their relationship. Some of the basic
characteristics which explain management as a science are:
i. Universally acceptance principles: Scientific principles
represent basic facts, which can be applied in all the situations, at
any place and at any time. The principles of management such as
unity of direction, division of labour etc can be applied
universally.

ii. Experimentation and observation: The fundamental principles
of management were derived by conducting scientific experiments
and through the observations. For example, the employees will be
more satisfied when they receive fair remuneration.
iii. Cause & Effect Relationship: Management explains the cause
and effect relationship between the variables. For examples, lack
of balance (cause) between authority & responsibility will leads to
ineffectiveness (effect).
iv. Test of validity & predictability: The principles of management
can be tested for validity. i.e, the principle of unity of command,
can be tested by using two employees, one with single superior
and other with two superiors.
Thus, management is a systematic body of knowledge but not pure
science like physics, chemistry, biology etc. It is because it deals with
human, who possesses different attitudes and behaviours and it is very
difficult to predict such behaviours. Thus, management is known as
social science.
MANAGEMENT AS AN ART:
Art can be defined as the application of theoretical knowledge &
skills to get desired results. The various characteristics of
management as art include:
A. Practical knowledge: An artist should have the practical
knowledge related to the applications of theoretical principles. A
person never become a manager just by getting the degree of
management, he/she should have the knowledge to use the various
principles and concepts of management according to the situation.
B. Personal skills: The effectiveness of management depends upon
the personal skills of management that an individual possesses.
C. Creative: A manager has to take business decisions in different
situations, which may not occur earlier. For this he/she requires
intelligence and imagination for effective coordination of human
and non-human resources. Thus, an effective manager should be
more creative.
D. Perfection through practise: An artist should have the tendency
of getting more perfection through their practise. A manager
learns from trail and error method at the initial stage and the
applications of management principles makes them perfect over
their experience during their service.
E. Goal oriented: The success of an artist depends upon their ability
to achieve the desired goals. In the same manner, managers are
also directed towards accomplishment of pre-defined goals.

MANAGEMENT AS A PROFESSION:
The expansion and changes in the business world has created more
demand for professionally qualified managers. As a result of this has
developed management as a profession. A profession can be
considered as an “occupation that requires specialized knowledge and
intensive academic preparations to which entry is regulated by a
representative body. The various characteristics of management to be
as a profession are:
i. Formal education & Training: The academic knowledge of
management can be taught by many formal educational
institutions. Law does not prescribe any qualification for a
manager but in order to perform the activities more efficiently the
managers should have basic knowledge in their respective areas.
ii. Specialized knowledge: Managers require systematic knowledge
of principles and techniques of management to solve the business
problems.
iii. Social obligations: Like other professions managers also have
some responsibilities towards the various parties of society, which
includes shareholders, customers, employees, public, government,
law etc.
iv. Code of conduct: A professional has to abide by code of conduct
which contains rules and regulations, norms of honesty, integrity
and special ethics. In order to ensure self disciplines among the
members management associations has defined code of conduct.
And has the right to take actions if any of the member violate the
code of conduct.
TAYLOR’S THEORY:
After the industrial revolution the business in America has
more scope for its growth and expansion and the labor force in
America are more reliable, hardworking but have less intellectual
skills. The problem can be resolved in two ways:
 Substituting the capital for labor
 Increasing the efficiency of labor.
Thus, scientific management emerged as a means of studying work
process and finding ways to make them more efficient.
Frederick Winslow Taylor, who is known father of scientific
management has concentrated on second way( increasing through
efficiency of labor). He joined the American Society of Mechanical
Engineers in 1886 and used this organization to develop and test the
ideas and formulate while working in various steel firms. In one of
these firms, Midvale Steel Company, he observed the labor

productivity is far less and he believed that the reason for this is the
ignorance of fair day’s work. At that time there is no method to
determine expected daily output per worker, work standard and wage
system.
The four principles contributed by F.W. Taylor for increasing the
labor efficiency are:
i. Determining the method of doing work.
ii. Define the rules and standards to perform the task by using
new method.
iii. Implementing the scientific methods in selection and training
the employees.
iv. Introduction of incentive pay system.
Contribution of Gilbreths to scientific management approach:
F. W. Taylor is not the single management thinker of scientific
management approach. Frank Gilbreth and Lillian Gilbreth (wife and
husband) has extended the ideas of Taylor. The Gilbreths has broken
the job into its elementary components and find the better way to
perform each component action which is called as time and motion
study. Time and motion study is the process of analyzing work to
determine the most efficient motions for performing tasks and to
determine the appropriate elapsed time for the completion of the task
or job.
FAYOL’S PRINCIPLES OF MANAGEMENT:
Henri Fayol was the CEO of comambault Mining when he
proposed the fourteen principles for effective management. Fayol
devised his principles base on his observations of workers and
managers at his company.
The fourteen principles include:
i. Division of labor:
The efficiency of a job dependents on the specialized worker
performing the job thus, as the labor are more specialized the
efficiency of the work will increases.
ii. Authority and responsibility:
Managers must have the authority to give orders and they must have
the responsibility for the effectiveness of their department.
iii. Unity of command:
This principle states that an employee should receive instructions
from only one superior. When an employee gets the instructions from
more than one superior it creates conflicts in instructions and
confusion to the employees.
iv. Unity of direction:
The employees working within an organization and who has same
objective should be directed by same plan of action.

v. Line of authority:
The line of authority should flow in a descending order. The top level
management should have more authorities than middle level than
lowest level in an organization.
vi. Centralization:
Centralization means possessing the complete authorities in the single
hand where as assigning some of the authorities to the subordinates is
known as decentralization. Fayol says that the top level management
delegate some of the authorities to their subordinates so that they are
able to fulfill their responsibilities.
vii. Initiative:
Fayol believes that the managers should encourage the employees to
take initiative that benefits to the organization.
viii. Discipline:
Members of an organization need to respect to the rules and
agreements that govern the organization. Fayol emphasized that
employees should be expected to be obedient, energetic, concerned
about the welfare of the organization.
ix. Order:
It describes the arrangement of jobs, employees and materials to
provide the organization with great benefits and to provide career
development opportunity to the employees.
x. Equity:
The employees will perform at their higher level when the managers
are treating them with respect, harmony and justice.
xi. Remuneration:
The employee commitment towards the organization can be
influenced by the returns that the organization is providing to them.
Thus, for effective performance of an employee the organization has
to pay fair remuneration to their employees.
xii. Subordination of individual interest with organizational
interest:
The goals of an organization can be achieved by their employees.
Hence, the managers should make the individual employees to define
their goals with respect to the organizational goals.
xiii. Stability:
The long term employment of the employees helps them to develop
the skills and potential in order to make significant contribution to the
organization.
xiv. Esprit de corps:
Promoting team spirit will give the organization a sense of unity. To
Fayol, even small factors could help to develop the spirit. For
example, the use of verbal communication instead of written will
develop a sense of attachment among the employees.

HAWTHORNE EXPERIMENT:
A well-known series of research studies conducted at the
Hawthorne works of the Western Electric company. (Behavioral
approach). The studies were conducted between 1924 and 1933 and
are known as Hawthorne Studies.
Basis for experiment:
The research was initiated as an attempt to determine whether
physical characteristics of the work setting such as level of
illumination affect worker performance. The research was conducted
by changing the illumination factors. Basically the workers has been
classified into two groups, test group and control group. The various
lighting/ illumination factors has been provided to the test group.
Result of the experiment:
According to the Taylor’s scientific theory the performance of
test group has to be increased. But the results produced by the
experiments were surprising. The performance of control group and
test group has been increased to a great extend regardless of
illumination factors. The performance dropped only when the level of
illumination factors are very less.
Mayo’s contribution:
To find out the reason for the results the investigators recruited
noted Harvard Psychologist Elton Mayo. Mayo proposed series of
experiments for a period of two years on the different group of female
workers by changing different illumination factors such as length of
rest time, frequency of rest time, flexible work timings etc.
Mayo also found the results i.e, increase in the performance of
workers irrespective of illumination factors and he discovered the
reason for the increase in performance is the presence of researcher in
the workplace. The presence of researcher was affecting the
performance because the workers enjoyed the attention and produced
the results they believed the researchers wanted.
Hawthorne effect:
The effect of increase in productivity due to the increased
attention of the researcher is known as Hawthorne Effect.
Thus, Elton Mayo has concluded that the presence of
researcher will increases the performance of workers.
SYSTEMS APPROACHTO MANAGEMENT:
This approach considers organization as a system. This
approach focuses on solving technical rather than human behavior
problems. According to this approach an organization is considered as
the interrelated parts with a unified purpose. From this perspective,

management should focus on efficiency and effectiveness in each part
of the organization, with the understanding that actions taken in one
part of the organization affect other parts of the organization. For
example, a new policy in production department may affect the
different departments such as marketing, finance, human etc,. Thus, in
an organization no department exists and operates in isolation from
the other.
The approach also views the organization as lined to its
environment. Organizational effectiveness, even survival, depends on
the organization interaction with its environment.
Key concepts of systems approach:
 Subsystem:
Subsystems are those parts which make up the whole system. Each
system in turn may be a subsystem of a large system. For example,
factory is a subsystem of a firm, firm is a subsystem of an industry;
industry is a subsystem of national economy.
 Synergy:
It describes that the departments that interact with co-operation are
more productive than they operate in isolation, which is known as
synergy.
 Open system:
An organization (System) which interacts with its environment is
known as open system. i.e., it is influenced and influencing the
environment.
 Closed system:
It is a system which does not interact with its environment.
 System boundary:
It is the limit or boundary within which an organization can operate.
In closed system it is rigid and in open system it is flexible.
 Flows:
Generally the materials, men and energy flows from one point to
other. If a manufacturing unit is considered the input undergo
transformation and exit as output.
Input
Transformation Output
External environment
Feedback

 Feedback:
It is the system in which the results of actions are returned to the
individuals, allowing work procedures to be analyzed and corrected.
CONTINGENCYTHEORYOF MANAGEMENT:
A contingency approach to management is based on the
theory that management effectiveness is contingent, or dependent,
upon the interplay between the application of management behaviors
and specific situations.
Fiedler's Contingency Theory proposes the following concepts:
Fiedler's Contingency Theory says there is no one best way to manage
an organization.
Fiedler's Contingency Theory of leadership says that a leader must be
able to identify which management style will help to achieve the
organization's goals in a particular situation
The main component of Fiedler's Contingency Theory is the least
preferred co-worker (LPC) scale which measures a manager's
leadership orientation.
This theory was developed by based on the contingency theory
of leadership developed by Fred Fiedler. The theory states that
management effectiveness, as it relates to group effectiveness, is a
component of two factors: task motivation, or relation motivation, and
circumstances. Task motivation or relation motivation, can be
measured by the least preferred co-worker (LPC) scale.
Least Preferred Co-worker, who would like to work with the
manager again, will give score to the manager on a range of scales
between positive factors (friendly, helpful, cheerful etc) and negative
factors (unfriendly, unhelpful, gloomy etc).
For example:
Unfriendly 1 2 3 4 5 6 7 8 Friendly
Unpleasant 1 2 3 4 5 6 7 8 Pleasant
Tense 1 2 3 4 5 6 7 8 Relaxed
High LPC leaders tend to have close and positive relationships and
act in a supportive way, even prioritizing the relationship before the
task. Low LPC leaders put the task first and will turn to
relationships only when they are satisfied with progress of the work
is going on.
Three factors are then identified about the leader, member and the
task, as follows:
 Leader-Member Relations: The extent to which the leader
has the support and loyalties of followers and relations with
them are friendly and cooperative.

 Task structure: The extent to which tasks are standardised,
documented and controlled.
 Leader's Position-power: The extent to which the leader has
authority to assess follower performance and give reward or
punishment.
The best LPC approach depends on a combination of these three.
Generally, a high LPC approach is best when leader-member
relations are poor, except when the task is unstructured and the
leader is weak, in which a low LPC style is better.
#
Leader-
Member
Relations
Task
structure
Leader's
Position-
power
Most
Effective
leader
1 Good Structured Strong
Low
LPC
2 Good Structured Weak
Low
LPC
3 Good Unstructured Strong
Low
LPC
4 Good Unstructured Weak
High
LPC
5 Poor Structured Strong
High
LPC
6 Poor Structured Weak
High
LPC
7 Poor Unstructured Strong
High
LPC
8 Poor Unstructured Weak
Low
LPC
MOTIVATION:
Motivation is derived from the word motive. The term motive
is derived from the Latin word ‘moverse’, which means to move.
Motive is defined as an inner state that energizes, activates and directs
the behavior of individuals towards certain goals. Motivation starts
with an unsatisfied condition and ends with movement to release that
unsatisfied condition, with goal directed behavior as a part of the
process
According to Encyclopedia of management, “motivation refers
to the degree of readiness of an organization to pursue some
designated goal and implies the determination of the nature and locus
of the forces, including the degree of readiness”.
Types of motives:

Motives are classified into three types. They are primary
motives, general motives and secondary motives.
 Primary motives:
These are unlearned and are psychological, biological. Ex:
hungry, sleep, etc.
 General motives:
These are unlearned and not physiological which can’t be
classified either as primary motives or secondary motives. Ex:
Curiosity, manipulation, affection etc.
 Secondary motives:
These play a vital role in organization behavior. These are
closely related to learning concepts. Ex: Need for security,
need for power etc.
Types of Motivation:
The performance of an individual can be increased in two
ways. i.e, by giving positive motivation and negative motivation.
 Positive motivation:
In case of positive motivation the efficiency of an individual can
be increased by providing some rewards, appreciation, awards,
(monetary or non-monetary), additional benefits etc.
 Negative motivation:
When the employees are very lazy, work avoiding, not initiative
then the awards, rewards won’t change their performance. The
managers will take stick action such as punishments, to increase
the performance of these people. Enhancing the performance of an
individual by taking serious action, giving punishment, by
creating fear of losing job etc is known as negative motivation.
MOTIVATIONAL THEORIES:
NeedTheories:
Over the years psychologists have studied a number of
concepts that have represented the energetic force, which constitutes
human motivation. The most commonly used concept in theories of
work motivation is “needs”.
MASLOW’S THEORY:
Abraham Maslow, a clinical psychologist developed a
motivational theory known as hierarchy of needs. Maslow’s theory
is easy to understand thus, it is widely accepted today in management
theory and practices. As the needs are in a hierarchical manner this
theory can also known as hierarchical theory of needs.
Assumptions:
Maslow’s has explained the needs based on two assumptions. They
are:

 Each person’s needs depend on what he already has. Only
needs not yet satisfied can influence behavior. A satisfied need
cannot influence behavior.
 Needs are arranged in a hierarchy of importance. Once one
need is satisfied, another emerges and demands satisfaction.
Maslow has classified the individual needs in 5 levels. The
lowest one is the physiological needs and the highest is self
actualization.
I. Physiological needs:
These are the basic needs of an individual such as water, air, food, etc.
Maslow states that until these are satisfied an individual no other
needs will serve as a basis for motivation. Organizational factors that
might satisfy psychological needs are pay, allowances, incentives,
benefits etc.
II. Security or safety needs:
Safety needs include protection from physical harm, ill, health,
economic disaster etc. once the physiological needs are satisfied then
the individual thinks to continue to satisfy these physiological needs.
Job security, membership in unions, severance pay, retirement plan,
health benefits etc will be considered as security/safety needs in an
organization.
III. Social needs:
Social needs are related to the social nature of people and to their
need for companionship. Non-satisfaction in this level of needs may
affect the individual’s mental health. Organizational conditions that
help to satisfy these needs include encouraging team building,
providing supportive supervision practices, permitting coworkers
opportunity to interact socially on the job. These are also known as
affiliation or acceptance needs.
IV. Esteem needs:
Esteem needs comprise both the awareness of one’s importance to
others( self-esteem) and the actual esteem of others. The satisfaction
of these esteem needs leads to self-confidence and prestige. These
needs are power, status, self-confidence, prestige. For an employee
these represent status symbols, awards, promotions, titles, promotion
V. Self-actualization:
This is the highest need in hierarchy. This refers to the desire to
become more and more what one is, to become everything one is
capable of becoming. Maslow proposes that the satisfaction of self-
actualization needs will tend to increase the strength of all the other
needs. Organizations can help employees satisfy self-actualization
needs by encouraging creativity, allowing risk-taking decision
making, supporting workers in their efforts to develop their skills.

NEED WORK EXAMPLE
Physiological needs Pay, allowances, incentives, benefits
Safety/ security needs
Job security, membership in unions,
severance pay. retirement plan, health
benefits
Social needs
encouraging team building, providing
supportive supervision practices,
permitting coworkers opportunity to
interact socially on the job,
Esteem needs
status symbols, awards, promotions,
titles, promotion
Self-actualization
creativity, allowing risk-taking
decision making, supporting workers
in their efforts to develop their skills
HERZBERG'S TWO FACTOR THEORY:
Frederick Hertzberg has modified the Maslow's theory of
motivation into two factors. He conducted his study based on the need
satisfaction on 200engineers and accountants. He defined the two
factors by asking the participants about the most satisfactory and
dissatisfactory factors. The participants then expressed the different
working conditions fo their feeling. The two factors identified by
Hertzberg are: maintenance factors and motivators.
Maintenance factors:
Self
actualization
esteem needs
Social needs
safety/ security needs
Psychological needs

In the absence of the factors will lead to the dissatisfaction of
an individual but the presence can't satisfy are known as maintenance
factors or dissatisfies or hygiene factors. Satisfiers or motivators:
These are the factors whose presence will satisfy an individual
and the absence of these factors may not effect.
The various satisfiers and dissatisfies include :
Dis- satisfiers Satisfiers
Company policies, pay,
relationship with superior, Working
conditions, job security, personal
life, technical support, etc.,
Recognition, achievement,
advancement, work itself,
possibility of growth,
responsibility etc
THEORY X AND THEORY Y:
Douglas Mc Gregor proposed two different views of human
being. One view of negative human beings and the other is positive
human beings.
Theory X:
Mc Gregor has explained about the negative characteristics of human
beings under Theory X. The characteristics of individuals under this
are:
 Dislike the work
 Lazy
 Avoid work
 Lack of initiativeness
 Need continues monitoring
 Little ambitious
 Avoided responsibilities
Theory Y:
Under theory Y he describe the positive human being, Who are
 Working with interest and commitment
 Initiative
 Seek responsibilities
 Has more potential
 Self-directed and self controlled.
 Intelligent and creative.
Motivation:
Theory X:
Individuals fall under theory x are self-centered , indifferent towards
organizational goals and thus , managers can motivate these
individuals by using negative motivation such as punishments,
threatening, coercion etc. Generally this type of employees will be
seen in govt. organizations and the public sectors where the
employees are not trusted.

Theory Y:
As these individuals are self controlled the managers can
easily motivate them by positive motivation. The motivational factors
may include job design, job enrichment , more responsibilities,
awards etc. Mostly the private sector employees will be considered as
theory Y.
MONETARYAND NON-MONETARYINCENTIVES:
The motivational factors that motivate a person to work and which
can be used to enhance their performance can be classified into two
categories—monetary factors and non-monetary factors
MONETARY INCENTIVES
The purpose of monetary incentives is to reward associates for
excellent job performance through money, including profit sharing,
project bonuses, stock options and warrants, scheduled bonuses, and
additional paid vacation time. Traditionally, these have helped
maintain a positive motivational environment for associates.
Monetary Factors:
Monetary factors are extrinsic to work, such as:
i. Salary or wages:
This is one of the most important motivational factors in an
organization. Salaries and wages should be fixed reasonably and paid
on time.
ii. Bonus:
Bonus is an extra payment over and above salary, and it acts as an
incentive to perform better. It is linked to the profitability and
productivity of the organization.
iii. Financial incentives:
The organization provides additional incentives to their employees
such as medical allowance, travelling allowance, house rent
allowance, hard duty allowance and children educational allowance.
iv. Promotion (monetary part):
Promotion is attached with increase in pay, and this motivates the
employee to perform better.
v. Profit sharing:
This is an arrangement by which organizations distribute
compensation based on some established formula designed around the
company’s profitability.
vi. Stock option:
This is a system by which the employee receives shares on a
preferential basis which results in financial benefits to the employees.

NON-MONETARY INCENTIVES
The purpose of non-monetary incentives is to reward associates for
excellent job performance through opportunities, including flexible
work hours, training and education, pleasant work environment, and
sabbaticals.
Non-monetary Factors:
Non-monetary factors are rewards intrinsic to work, such as the
following:
i. Status:
An employee is motivated by better status and designation.
Organizations should offer job titles that convey the importance of the
position.
ii. Appreciation and recognition:
Employees must be appreciated and reasonably compensated for all
their achievements and contributions.
iii. Work-life balance:
Employees should be in a position to balance the two important
segments of their life—work and life. This balance makes them
ensure the quality of work and life. A balanced employee is a
motivated employee.
iv. Delegation:
Delegation of authority promotes dedication and commitment among
employees. Employees are satisfied that their employer has faith in
them and this motivates them to perform better.
v. Working conditions:
Healthy working conditions such as proper ventilation, proper lighting
and proper sanitation improve the work performance of employees.
vi. Job enrichment:
This provides employees more challenging tasks and responsibilities.
The job of the employee becomes more meaningful and satisfying.
vii. Job security:
This promotes employee involvement and better performance. An
employee should not be kept on a temporary basis for a long period.
LEADERSHIP STYLES:
Leadership is a part of management but not all of it.
Leadership is the ability to persuade others to seek defined objectives
enthusiastically. It is the human factor which binds a group together
and motivates it towards goals. Management activities such as
planning, organizing and decision making are dormant cocoons ( No
change in its state) until the leader triggers the power of motivation in
people and guides them toward goals.

Leadership is defined as “the process whereby one individual
influences other group members towards the attainment of defined
group or organizational goals.” It is viewed that the followers also
influence leaders in fact leader and follower influence each other
mutually.
Characteristics of follower that influence leader are:
 Followers Performance
 Followers characteristics
 Nature of work
 Business policies
Characteristics of leader that influence followers are (Powers of
leader):
 Reward power
 Leader character
 Coercive( punish) power
 Expert power
 Legitimate Power (influence through guiding in doing a Job)
 Referent power
LEADERSHIP QUALITIES
i. Integrity: Integrity is the integration of outward actions and
inner values. A person of integrity is the same on the outside and on
the inside. Such an individual can be trusted because he or she never
veers from inner values, even when it might be expeditious to do so.
A leader must have the trust of followers and therefore must display
integrity.
ii. Dedication: A leader inspires dedication by example, doing whatever
it takes to complete the next step toward the vision. By setting an
excellent example, leaders can show followers that there are no nine-
to-five jobs on the team, only opportunities to achieve something great.
iii. Honest: Honest dealings, predictable reactions, well-
controlled emotions, and an absence of tantrums and harsh outbursts
are all signs of integrity. A leader who is centered in integrity will be
more approachable by followers.
iv. Magnanimity: Magnanimity means giving credit where it is
due. A magnanimous leader ensures that credit for successes is spread
as widely as possible throughout the company. Conversely, a good
leader takes personal responsibility for failures. This sort of reverse
magnanimity helps other people feel good about themselves and
draws the team closer together. To spread the fame and take the blame
is a hallmark of effective leadership.
v. Humility: Leaders with humility recognize that they are no
better or worse than other members of the team. A humble leader is
not self-effacing but rather tries to elevate everyone. Leaders with

humility also understand that their status does not make them a god.
Mahatma Gandhi is a role model for Indian leaders, and he pursued a
“follower-centric” leadership role.
vi. Openness: Openness means being able to listen to new ideas,
even if they do not conform to the usual way of thinking. Good
leaders are able to suspend judgment while listening to others’ ideas,
as well as accept new ways of doing things that someone else thought
of. Openness builds mutual respect and trust between leaders and
followers, and it also keeps the team well supplied with new ideas that
can further its vision.
vii. Creativity: It is the ability to think differently, to get outside
of the box that constrains solutions. Creativity gives leaders the ability
to see things that others have not seen and thus lead followers in new
directions.
viii. Fairness: Fairness means dealing with others consistently and
justly. A leader must check all the facts and hear everyone out before
passing judgment. He or she must avoid leaping to conclusions based
on incomplete evidence. When people feel that they are being treated
fairly, they reward a leader with loyalty and dedication.
ix. Assertiveness: It represents the ability to clearly state what
one expects so that there will be no misunderstandings. A leader must
be assertive to get the desired results. Along with assertiveness comes
the responsibility to clearly understand what followers expect from
their leader.
x. Sense of humor: A sense of humor is vital to relieve tension
and boredom, as well as to defuse hostility. Effective leaders know
how to use humor to energize followers. Humor is a form of power
that provides some control over the work environment. And simply
put, humor fosters good camaraderie.
LEADERSHIP STYLES:
Leadership is practiced by its styles which may be positive or
negative. The styles used by the military officers and traditional
managers are mostly negatives whereas those of the modern and high-
technology organizations are positive.
Ex: Positive styles—Toyota, Lucky-Goldstar (LG), Samsung,
Hyundai…..
Negative styles – Indian public sector companies – Indian
railway, HCL, HMT….
There is no clear-cut leadership style which is suitable or applicable
universally and in all situations. Thus, the leaders have to adopt
appropriate style depending upon the situation demand. The various
leadership styles based on the traditional theories are:
i. Free-rein or Laissen-faire style:

These leaders play less or negative role. They avoid authorities and
responsibilities. They mostly depend upon the group for all the
activities such as defining objectives, goals, policies, programmes etc.
These leaders never provide training and motivation to the followers.
The group members train and motivate themselves.
ii. Autocratic style:
Autocratic leaders centralize decision making power with themselves.
The followers does not have a chance to express and involve in
decision making and implementation. The followers has to follow the
instructions of leaders. The different types of autocratic leaders are:
 Strict autocratic – autocratic because their method of influencing
subordinates is negative.
 Benevolent autocratic – Typically gives rewards to the followers.
 Incompetent autocrat – autocratic to hide their incompetency.
iii. Democratic style:
These leaders decentralize the authority and encourage subordinates
to express their opinion in decision-making and implementation. But
the final decision will be taken by the leader. i.e, the decisions will be
taken by consultation.
iv. Participative style:
Participative leaders decentralize authority and encourage the
subordinates to participate in decision-making and implementation
processes. Decision will be made by the leader and his subordinates.

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