BBA109_Principles of Management (1)-converted

The theory demonstrates that the individuals are concerned both with their own rewards and also with what others get in their comparison. Employees expect a fair and equitable return for their contribution to their jobs. Employees decide what their equitable return should be after comparing their inputs and outcomes with those of their colleagues. Employees who perceive themselves as being in an inequitable scenario will attempt to reduce the inequity either by distorting inputs and/or outcomes psychologically, by directly altering inputs and/or outputs, or by quitting the organization. Expectancy Theory of Motivation The expectancy theory was proposed by Victor Vroom of Yale School of Management in 1964. Vroom stresses and focuses on outcomes, and not on needs unlike Maslow and Herzberg. The theory states that the intensity of a tendency to perform in a particular manner is dependent on the intensity of an expectation that the performance will be followed by a definite outcome and on the appeal of the outcome to the individual. The Expectancy theory states that employee’s motivation is an outcome of how much an individual wants a reward (Valence), the assessment that the likelihood that the effort will lead to expected performance (Expectancy) and the belief that the performance will lead to reward (Instrumentality). In short, Valence is the significance associated by an individual about the expected outcome. It is an expected and not the actual satisfaction that an employee expects to receive after achieving the goals. Expectancy is the faith that better efforts will result in better performance. Expectancy is influenced by factors such as possession of appropriate skills for performing the job, availability of right resources, availability of crucial information and getting the required support for completing the job. Instrumentality is the faith that if you perform well, then a valid outcome will be there. Instrumentality is affected by factors such as believe in the people who decide who receives what outcome, the simplicity of the process deciding who gets what outcome, and clarity of relationship between performance and outcomes. Thus, the expectancy theory concentrates on the following three relationships: • Effort performance relationship: What is the likelihood that the individual’s effort be recognized in his performance appraisal? • Performance-reward relationship: It talks about the extent to which the employee believes that getting a good performance appraisal leads to organizational rewards. • Rewards-personal goals relationship: It is all about the attractiveness or appeal of the potential reward to the individual. 149 CU IDOL SELF LEARNING MATERIAL (SLM)

Vroom was of view that employees consciously decide whether to perform or not at the job. This decision solely depended on the employee’s motivation level which in turn depends on three factors of expectancy, valence and instrumentality. Advantages of the Expectancy Theory • It is based on self-interest individual who want to achieve maximum satisfaction and who wants to minimize dissatisfaction. • This theory stresses upon the expectations and perception; what is real and actual is immaterial. • It emphasizes on rewards or pay-offs. • It focuses on psychological extravagance where final objective of individual is to attain maximum pleasure and least pain. Limitations of the Expectancy Theory • The expectancy theory seems to be idealistic because quite a few individuals perceive high degree correlation between performance and rewards. • The application of this theory is limited as reward is not directly correlated with performance in many organizations. It is related to other parameters also such as position, effort, responsibility, education, etc. Implications of the Expectancy Theory • The managers can correlate the preferred outcomes to the aimed performance levels. • The managers must ensure that the employees can achieve the aimed performance levels. • The deserving employees must be rewarded for their exceptional performance. • The reward system must be fair and just in an organization. • Organizations must design interesting, dynamic and challenging jobs. The employee’s motivation level should be continually assessed through various techniques such as questionnaire, personal interviews, etc. TYPES OF MOTIVATION Motivation is of different types, as seen in different theories of motivation. Some of the specific types are examined below. Positive Vs Negative Motivation Positive motivation: Positive motivation induces people to do work in the best possible manner and to improve their performance. In positive motivation, better facilities and rewards are provided for people performing well and mostly rewards are either financial or non-financial. Negative motivation: Negative motivation aims at controlling the negative efforts of the work and seeks to create a sense of fear for the worker. Negative motivation results in lack of good 150 CU IDOL SELF LEARNING MATERIAL (SLM)

performance. Negative motivation also implies that a worker must be punished if he/she is not performing as required. The positive and negative motivation approaches aim to inspire the will of the people to work but their approach is different. Whereas one approaches the people to work in the best possible manner providing better monetary and non-monetary incentives, the other tries to induce the man by cutting their wages and other facilities and amenities on the belief that man works out of fear. Extrinsic Vs Intrinsic Motivation Intrinsic Motivation: Intrinsic motivation means that the individual's motivational stimuli are coming from within. The individual has the desire to perform a specific task, because its results are in accordance with his belief system or fulfils a desire and therefore importance is attached to it. Our deep-rooted desires have the highest motivational power. Below are some examples: i. Acceptance: People in general have a need to feel their decisions are accepted by co-workers. ii. Curiosity: Humans have the desire to be aware of existing circumstances. iii. Honour: People or employees must respect the rules and to be ethical. iv. Independence: Employees need to feel they are unique. v. Order: People have the need to be more organized. vi. Power: People feel the need for power, to influence and be able to stay in command. vii. Social contact: The need for some social interactions. viii. Social Status: The desire to feel important. Extrinsic Motivation: Extrinsic motivation means that the individual's motivational stimuli are coming from outside. In other words, our desires to perform a task are controlled by an outside source. Note that even though the stimuli are coming from outside, the result of performing the task will still be rewarding for the individual performing the task. The most well-known and the most debated motivation is money. Below are some other examples: i. Employee of the month award ii. Benefit package iii. Bonuses iv. Organized activities Financial Vs Non-Financial Motivation 151 CU IDOL SELF LEARNING MATERIAL (SLM)

Incentive is a form of motivation and this often results in stimulus for greater action among individuals. Financial and extrinsic motivation is similar. Financial motivation includes monetary benefits, salary, bonus, increase in wages, special allowances, etc. Non-financial motivations are practised by many organizations and some of the factors that helps motivation are provided below: Status: Status means the position or rank of a person in the organisation; it can be high or low. Employees rank is directly linked with his/her authority, responsibility and other facilities in the organization. Since, employees desire for higher status, they can be motivated by raising their rank or position. Also, a rise in status will fulfil their needs related to esteem. Organizational Climate: The working system within an organizationrefers to the organizational climate. Climate includes freedom for individuals, awards, the importance of employees, etc. Every person prefers to be part of a better organizational climate. The manager has the responsibility of motivating employees by providing them a better organizational environment. Opportunities for Career Advancement: In general, every employee of an organization wants to have progress in his/her life. Promotion is one example of advancement. For the purpose of promotions, training and development facilities are provided for employees. Managers provide promotion by using training and development facilities. This is one important method to keep employees motivated. Job Enrichment: Job enrichment increases the importance of job. Such a job should have authority, responsibility, and a wide scope for challenges; there should be a need of higher knowledge and experience; the opportunities for personal development should be available, and there should be absolute freedom to take decisions. The employees have a sense of pride in obtaining such job placement. Job enrichment improves the work interest in people in order to have motivation automatically. Recognition Programmes for Employees: Employees normally wish to be considered as important in their organization. This implies that he/she must have a unique identity and must appear to be distinctive. Given below are some of examples of employee recognition: ▪ Congratulating the employee for good work performance ▪ Displaying employee’s achievements on the information board and publishing them in the news magazine of the organisation ▪ Awarding certificates of merit at the ceremonial functions of the organisation for better work performance ▪ Presenting mementos 152 CU IDOL SELF LEARNING MATERIAL (SLM)

▪ Honouring for offering valuable suggestions Job Security: Job security is an important non-monetary motivator. Job security refers to a feeling of stability and permanence in the organization. For example, if an employee has a sense of fear or insecurity in his mind, that he can be removed from his job any time, he will never work wholeheartedly and this worry continues troubling him. On the other hand, if he has a feeling that his job is secure and permanent and he cannot be removed from his job easily, he will work without any worry and with an easy mind. This can also be a reason why a permanent job with less salary is more preferred than to a temporary job with more salary. Employees Participation: Employees get encouraged to notice their participation in managerial works. Participating employees offer full co-operation in making policies and procedures successful in the office. Employees Empowerment: Employee’s empowerment means giving the employees more freedom to take decisions. When employees have more decision-making powers, they consider themselves as doing important work in the organization. This feeling is also motivation. SUMMARY Motivation may be defined as the complex of forces inspiring a person at work to intensify his willingness to use his maximum capabilities for the achievement of certain objectives. Motives or needs of a person are the starting point of the motivation process. Motives are emerging, invisible forces. One motive may result in many different behaviours. Also, the same behaviour may result from many different motives. Behaviour can be used as an estimate of an individual's motive. Motives can operate in harmony or in conflict. Motives change over time. Motives can also interact with the environment. The basic elements oi' the process of motivation are: (i) behaviour, (ii) motives, (iii) goals, (iv) some form of feedback or reaction. Behaviour is generally motivated by the desire to achieve a goal. Motives are directed towards goals and prompt people to action. McGregor formulated two sets of assumptions about human beings, which formed the basis of Theory X and Theory Y of motivation. He described theory X as the traditional theory which required workers to be persuaded and pushed into performance on the assumption that the average human being dislikes work and would, avoid it if he can. He propounded Theory Y based on the assumption that. people by nature love work and can exercise self-direction and self-control in the service of objectives to which they are committed. Maslow's need priority theory is based on needs of people which arise in sequence and hierarchical order from physiological needs through security needs, social needs, esteem needs and self-fulfilment needs. Herzberg's two-factor theory distinguishes between maintenance or hygienic factors and motivation factors, the former having only negative significance and the latter having positive effect of motivation. The absence of maintenance factors like wages, job security, physical conditions of work and such extrinsic elements cause dissatisfaction, but their 153 CU IDOL SELF LEARNING MATERIAL (SLM)

presence does not provide motivation. On the other hand, motivational factors such as recognition, achievement, etc. are essential for motivating employees and these factors provide positive incentives. Herzberg emphasised the importance of job enrichment as one of the motivational factors. It refers to enriching the job content or the deliberate upgrading of responsibility, scope and challenge in work. Job enrichment differs from job enlargement which involves horizontal loading, that is, addition of more tasks of the same nature. Motivation may be classified on different bases e.g. positive and negative, extrinsic md intrinsic, financial and non-financial. Positive motivation is the process of attempting to influence the employee’s behaviour through the possibility of reward. Negative motivation is based on fear & threats i.e. demotion, lay off etc. Extrinsic motivators arise away from the job and are financial in nature. Intrinsic motivators are concerned with tile state of self- actualisation and occur on the job. Financial motivation refers to motivation induced by money or money's worth, like wages and salaries, bonus, medical benefits, etc. Non-financial motivation includes incentives like competition, praise, knowledge of results, participation in management, opportunity for growth etc. KEY WORDS/ABBREVIATIONS • Esteem and status needs: They relate to self-confidence independence, achievement, competence, initiative, success, etc. • Extrinsic Motivation: Extrinsic motivation refers to the incentives which a= external to the job, such as, salary, fringe benefits, etc. • Financial Incentives: Financial incentives are those which involve money or benefits in kind like wage, salary, retirement benefits, insurance, medical reimbursement etc. • Goals: Goals are the ends which provide satisfaction of human needs. • Intrinsic Motivation: It refers to incentives internal to the job and provides satisfaction during the performance of work itself. • Job Enrichment: It refers to the process whereby a job is enriched in terms of its contents, responsibility, scope, variety and challenge. • Motivation: Motivation refers to the process by which human needs direct and control the behaviour of a human being. • Motives: Motives are the primary energisers of behaviour which prompt people to action. • Motivators: Motivators are associated with positive feelings of employees about the job. • Non-Financial Incentives: It includes incentives like status, recognition, challenge in work etc. Physiological Needs: These needs relate to survival and maintenance of human life, such as, need for food, clothing, shelter, water, rest, etc. • Negative Motivation: It refers to the process of influencing employees' behaviour through fear of losing the job or losing promotion. 154 CU IDOL SELF LEARNING MATERIAL (SLM)

• Positive Motivation: It refers to the process of influencing employees' behaviour through the possibility of reward. • Safety and Security Needs: These needs relate to job security, physical security, income security, provision for old age, etc. LEARNING ACTIVITY 1. Define motivation. ………………………………………………………………………………………………………… …………………………………………………………........................................................................ 2.What is meant by hierarchical nature of needs? Is the hierarchy rigid? Discuss with suitable examples. ………………………………………………………………………………………….……………… …………………………………………………………………………………………………………. UNIT END QUESTIONS (MCQ AND DESCRIPTIVE) A. Descriptive Types Questions 1. What do you understand by the tern 'motivation'? Explain importance of motivation in case of modem enterprise. 2. Explain Herzberg's two-factor theory and differentiate it from Maslow's theory of Need Hierarchy. 3. Enumerate assumptions of McGregor's Theory X and Theory Y. Which one is applicable in India? 4. “Motivation is a predisposition to act in a specific goal-oriented way”. Comment 5. Which do you think to be more conducive for the development of your organisation- Theory X or Theory Y and why? 6. Under the motivation-hygiene theory, what would you categorise salary and interpersonal relations as - as motivators or demotivators and why? 7. Discuss the other types of motivation mentioned in unit with day to day examples. B. Multiple Choice Questions 1. The ability and willingness to do work results in a. Improved performance b. Reduced employee turnover c. Change negative thinking in employees d. Resistance to change e. None of the above 155 CU IDOL SELF LEARNING MATERIAL (SLM)

2. The internal feeling which arises from the need and desires of a person is The component of directing A continuous process A psychological aspect A dynamic process None of the above 3. The needs that emerge when the basic needs are satisfied and denote love, affection and belongingness is known as a. Esteem needs b. Social needs c. Psychological needs d. Self-actualization needs e. None of the above 4. The theory where workers compare the reward potential to the effort they must expend is known as Equity theory Expectancy theory Reinforcement theory Goal setting theory None of the above 5. Lack of good performance results in 4. a) 5. d) a. Positive motivation b. Intrinsic motivation c. Extrinsic motivation d. Negative motivation e. None of the above Answer Keys 1. a) 2. c) 3. b) REFERENCES • Koontz, O Donnel and Weirich. (2001). Principles of Management. New Delhi: Tata McGraw Hill Publishing Company. • Chopra, R.K. (2005). Principles & Practices of Management. New Delhi: Sun India Publication. 156 CU IDOL SELF LEARNING MATERIAL (SLM)

• Tripathi, P.C., and Reddy, P.N. (2006). Principles & Practices of Management. New Delhi: Tata McGraw Hill Publishing Company • Baron, R.A. (2010). Introduction to Psychology. Wadsworth Publishing Co., NJ • Harold F. O’Neil and Michael Drillings (Eds). (1994). Motivation: Theory and Research. Laurence Erlbaum Associates, New Jersey • Fowler, H (2008). Curiosity and Exploratory Behaviour. Open library, New York. • Morgan, C.T. and King, R.A. (2010). (11th edition) Introduction to Psychology. McGraw Hill, New Delhi 157 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT–10 LEADERSHIP Structure 10.0.Learning Objectives 10.1.Introduction 10.2.Meaning 10.3.Types of a Leader 10.4.Traits of a Leader 10.5.Leadership Styles Authoritarian Style: Participative Style: Free-rein Leadership Style: Forces influencing the Styles: 10.6.Summary 10.7.Key Words/Abbreviations 10.8.Learning Activity Unit End Questions (MCQ and Descriptive) References LEARNING OBJECTIVES After studying this unit, you will be able to: • State the definitions of leadership • Explain the functions and characteristics of a leader • Describe different leadership theories in management • Discuss and analyse different leadership traits and styles INTRODUCTION The term leadership evokes a variety of thought and images in the minds of people. For example, a political leader can pursue a development cause, an explorer can organize his/her team in trekking across a hilly terrain, an executive or CEO can develop strategies for the company to overcome competition and so on. Leaders help themselves and others around them to do the right things. Leaders set direction, develop and build a vision and rally others to achieve that vision. Leadership is all about creating something new and useful and provides the direction to achieve goals for the organization and at the same time make the environment dynamic, exciting and inspiring. 158 CU IDOL SELF LEARNING MATERIAL (SLM)

In this unit the aspects and importance of leadership is discussed and analysed. Leadership is behaviour which is demonstrated through certain characteristics that individuals exhibit in their interactions. The characteristics of leadership and leaders are also explored. The significance of leadership is discussed along with the differences between manager and leader. The different leadership theories provided by management experts are also examined to understand the significance of each theory in management. Since leadership deals with human behaviour, humans have different styles. The unit also provides the qualities of effective leadership in organizations. Leadership is highly essential which helps organizations to sustain, achieve growth and performance in competitive environments. Leadership has nothing to do with seniority or one’s position in the hierarchy of a company. Leadership is often understood as a company’s senior most executives. Leadership has no relation to levels in hierarchy. Leadership has nothing to do with titles. Similarly, leadership has nothing to do with personal attributes. Good leaders are not domineering or have an icon image. Leadership is not management; this is important because leadership and management are not synonymous. Managers manage things, whereas leaders guide people. Technically a leader could use social influence to just organize the efforts of others, but leadership is about maximizing the effort of people. MEANING AND DEFINITION OF LEADERSHIP We have seen some important definitions in the introduction section. The topic of leadership has been an interesting area from historic times. However, the need for effective leadership is voiced more strongly in today’s management. The term leadership is recognized globally but there is still uncertainty on how to define it universally. Researchers explain that the heart of the problem of defining leadership lie two fundamental difficulties. Firstly, the notions such as ‘love’, ‘freedom’ and ‘happiness’, leadership is a complex concept open to subjective interpretation. Everyone has their own intuitive understanding of what leadership is, based on a mixture of experience and learning, which is difficult to capture into an objective definition. Secondly, the way in which leadership is defined and understood is strongly influenced by one’s theoretical stance. Some definitions given by experts are mentioned below: W.B. Gaille defined leadership as power and is a contested concept. Kellerman explained leadership as “Leaders are like the rest of us: trustworthy and deceitful, cowardly and brave, greedy and generous. To assume that all leaders are good people is to be wilfully blind to the reality of the human condition, and it severely limits our scope for becoming more effective at leadership.” Four common themes of leadership are mentioned in recent leadership theory. The four themes are: i. Leadership is a process ii. Leadership involves influence iii. Leadership occurs in a group context 159 CU IDOL SELF LEARNING MATERIAL (SLM)

iv. Leadership involves goal attainment. Hence, leadership defined by Northouse states “a process whereby an individual influences a group of individuals to achieve a common goal.” In this definition, the individual is located as the source of leadership. G.A. Yukl provided a collective concept of leadership, “Most definitions of leadership reflect the assumption that it involves a social influence process whereby intentional influence is exerted by one person (or group) over other people (or groups) to structure the activities and relationships in a group or organization.” A more general definition states that “Leadership is a process of social influence, which maximizes the efforts of others, towards the achievement of a goal.” There are many definitions of leadership. Some of the definitions of leadership are reproduced below: \"Leadership\" according to Alford and Beatty \"is the ability to secure desirable actions from a group of followers voluntarily, without the use of coercion.\" According to Chester I Barnard, \"it (leadership) refers to the quality of the behaviour of the individual whereby they guide people on their activities in organised efforts\". According to Terry, \"A leader shows the way by his own example. He is not a pusher, he pulls rather than pushes\". According to Koontz and O'Donnell, Managerial leadership is \"the ability to exert inter-personal influence by means of communication, towards the achievement of a goal. Since managers get things done through people, their success depends, to a considerable extent upon their ability to provide leadership\". In the words of R. T. Livingston, Leadership is \"the ability to awaken in others the desire to follow a common objective\". According to the Encyclopaedia of the Social Sciences, \"Leadership is the relation between an individual and a group around some common interest and behaving in a manner directed or determined by him\". According to Peter Drucker, Leadership \"is not making friends and influencing people, i.e., salesmanship is the lifting of man's vision to higher sights, the raising of man's performance to higher standards, the building of man's personality beyond its normal limitations\". The above definitions provide certain key elements on leadership. They are: i. Leadership is a result of social influence, and does not arise from position, or authority or power 160 CU IDOL SELF LEARNING MATERIAL (SLM)

i. In leadership other people are required. Leaders do not require people directly reporting to them. ii. Leadership is not a result of personality traits, attributes, or even a title; effective leadership is something beyond these attributes. iv. Leadership requires an objective with no intended outcome. Therefore, we can say that leadership is behaviour, but how the behaviour influences others makes the difference between good leadership and poor leadership. TYPES OF A LEADER/LEADERSHIP 1. Bureaucratic Leadership: Bureaucratic leadership follows a close set of standards. Everything is done in an exact, specific way to ensure safety and/or accuracy. One will often find this leadership role in a situation where the work environment is dangerous and specific sets of procedures are necessary to ensure safety. A natural bureaucratic leader will tend to create detailed instructions for other members of a group. The bureaucratic leadership style is based on following normative rules and adhering to lines of authority 2. Charismatic leadership: “Charismatic leadership emphasises primarily the magnetic personality and behaviour of leaders and their effects on followers, organizations, and society. Sociologists, political historians, and political scientists have widely accepted the theory of charismatic leadership originally advanced by Weber (1947). Charisma is regarded as of divine origin or as exemplary, and on the basis of them the individual concerned is treated as a leader. Mahatma Gandhi, Jawaharlal Nehru, Indira Gandhi, Lai Bahadur Shastri, and Mother Teresa were charismatic leaders. Charismatic leaders inspire via persona, reputation, and communications and also show courage, competence, and idealistic vision. Late President John F Kennedy and his look-alike Former. President Bill Clinton have often been called “The most charismatic leaders of 20th century” Another good example would be Adolf Hitler, who rose from a “Bohemian corporal” to “Herr Fuhrer” due to his ability to captivate people into following him. 3. Visionary Leadership: A visionary leader perceives challenges and growth opportunities before they happen, positioning people to produce extraordinary results that make real contributions to life. Some of the visionary 161 CU IDOL SELF LEARNING MATERIAL (SLM)

leaders include – Dalai Lama (for his ability to incorporate new ideas into his traditional framework while being a messenger for peace and enlightenment for the world), Mahatma Gandhi and Nelson Mandela (for his courage and conviction and perseverance against all odds to free and unite people for justice), and President Obama (for his ability to galvanize and inspire people with the vision that we can transform our consciousness & world). The list is endless. 4. Strategic Leadership: Strategic leadership refers to a manger’s potential to express a strategic vision for the organization, and to motivate and persuade others to acquire that vision. Strategic leadership can also be defined as utilizing strategy in the management of employees. It is the potential to influence organizational members and to execute organizational change. Strategic leaders create organizational structure, allocate resources and express strategic vision. Thus, this type of leadership relates to the role of top management. Strategic leaders work in an ambiguous environment on very difficult issues that influence and are influenced by occasions and organizations external to their own. The main objective of strategic leadership is strategic productivity. Another aim of strategic leadership is to develop an environment in which employees forecast the organization’s needs in context of their own job. Strategic leaders encourage the employees in an organization to follow their own ideas. Strategic leaders make greater use of reward and incentive system for encouraging productive and quality employees to show much better performance for their organization. Functional strategic leadership is about inventiveness, perception, and planning to assist an individual in realizing his objectives and goals. 5. Servant leadership: The term “Servant Leadership” was coined by Robert K. Greenleaf in The Servant as Leader, an essay that he first published in 1970. Leaders have a responsibility towards society and those who are disadvantaged. People who want to help others best do this by leading them. The servant-leader is servant first and leader next. The servant leader serves others, rather than others serving the leader. Serving others thus comes by helping them to achieve and improve. Famous examples of servant leaders include George Washington (America), Gandhi (India), and Cesar Chavez (Venezuela). 6. Substitutes for Leadership: 162 CU IDOL SELF LEARNING MATERIAL (SLM)

The term has been brought to light by Kerr and Jermier in 1978. According to them there are aspects of the work setting and the people involved that can reduce the need for a leader’s personal involvement, because leadership is already provided from within. The term substitutes mean the situation where leader behaviours are replaced by characteristics of subordinates, the task at hand, and the organisation. 7. Transactional and Transformational Leadership: Transactional leadership is based upon the assumptions that people are motivated by reward and punishment (Rational Man), social systems work best with a clear chain of command, when people have agreed to do a job, a part of the deal is that they cede all authority to their manager, and the basic purpose of a subordinate is to do what their manager tells them to do. The style of a transactional leader is that he works through creating clear structures whereby it is made clear as to what is required of subordinates and the rewards that they get for following orders. Punishments are not always mentioned, but they are also well- understood and formal systems of discipline are usually in place. To begin with, Transactional Leadership negotiates the contract whereby the subordinate is given a salary and other benefits, and the company gets authority over the subordinate. While the leader allocates work to a subordinate, they are considered to be fully responsible for it, whether or not they have the resources or capability to carry it out. When things go wrong, then the subordinate is considered to be personally at fault, and is punished for their failure (just as they are rewarded for succeeding). The leader often uses management by exception, working on the principle that if something is operating to defined (and hence expected) performance then it does not need attention. Exceptions to expectation require praise and reward for exceeding expectation, whilst some kind of corrective action is applied for performance below expectation. In management versus leadership spectrum, it is more towards the management end. Transactional leadership is based in contingency, in that reward or punishment is contingent upon performance. Transactional Leadership is still a popular approach with many managers, despite its limitation of ignoring complex emotional factors and social values. When the demand for a skill outstrips the supply, then Transactional Leadership often is insufficient. Transformational leadership is the answer. It “recognizes and exploits an existing need or demand of a potential follower… (And) looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower” 163 CU IDOL SELF LEARNING MATERIAL (SLM)

Transformational leadership is based upon the assumptions that people will follow a person who inspires them, a person with vision and passion can achieve great things, and the way to get things done is by injecting enthusiasm and energy. These leaders are focused on the performance of group members, but also want each person to fulfil his or her potential. Leaders with this style often have high ethical and moral standards. Transformational Leadership starts with the development of a vision. This vision may be developed by the leader, by the senior team or may emerge from a broad series of discussions. The next step is to constantly sell the vision. While doing so, he must create trust and personal integrity. Along with selling, the leader finds the way forward. And finally, transformation leaders remain upfront and central during the action and visible – constantly doing the rounds, listening, soothing and enthusing. Transformational Leader seeks to infect and reinfect their followers with a high level of commitment to the vision. They are people- oriented and believe that success comes first and last through deep and sustained commitment. Transformational Leaders are often charismatic, but are not as narcissistic as pure Charismatic Leaders, who succeed through a belief in themselves rather than a belief in others. Whilst the Transformational Leader seeks overtly to transform the organization, there is also a tacit promise to followers that they also will be transformed in some way One of the traps of Transformational Leadership is that passion and confidence can easily be mistaken for truth and reality. Paradoxically, the energy that gets people going can also cause them to give up. Transformational Leaders also tend to see the big picture, but not the details, where the devil often lurks. If they do not have people to take care of this level of information, then they are usually doomed to fail. Finally, transformational leaders, by definition, seek to transform. When the organization does not need transforming and people are happy as they are, then such a leader will be frustrated. It is important for the follower to understand the difference between Charismatic Leaders and Transformational Leaders. They both are Inspiring and both have a Vision and both are not as caring about people as followers might want them to be. Charismatic Leaders are Inspiring in order to lead for their own purpose which may or may not benefit the organization or people. “It’s all about me.” Transformational Leaders are inspiring in order to support a shared vision of improvement for the organization and its people. “It’s all about the organization.” The visions of transformational Leaders are practical and achievable in order to improve organization. Transformational Leaders often “downsize” the work force to 164 CU IDOL SELF LEARNING MATERIAL (SLM)

improve the organization. Transformational Leaders often “downsize” the work force to improve organizational efficiency for the good of the organization. On the other hand, Charismatic Leaders abuse or fire persons who do not agree with them, or who question their vision or otherwise inhibit their personal accomplishment as Leaders improve organizational efficiency for the good of the organization. On the other hand, Charismatic Leaders abuse or fire persons who do not agree with them, or who question their vision or otherwise inhibit their personal accomplishment as Leaders To conclude, transformational and transactional leadership are not opposite to each other, rather they are complementary. A great transformational leader has to be a great transactional leader as well. Table 10.1 Comparison between Task oriented leadership Task Oriented Leadership Factors/Styles Authoritarian Transactional Bureaucratic Urgency of a Allows leader to send Not efficient in terms of Time could affect task or time clear and direct punishing team members if bureaucratic leader if the pressure instructions by that saving they did something wrong team is inexperienced and as much time as possible. while there is a time limit. displays confrontation for Decisions are made as But can be efficient by some reason. Otherwise soon as possible. And also motivating them with rewards bureaucratic leader would eliminating any or bonuses. That could have clear and fixed obstructions or influence team to improve decisions based upon rules confrontation from team upon their performance and to and guidelines that would be members just as it occurs, be more initiative. time efficient, but might not so it doesn’t develop to be the best way to solve the serious problem. problem. Experience of Style that fits both Leader could introduce Good style for both team members experienced and punishments and rewards for inexperienced and inexperienced teams. inexperienced members to get experienced members, Experienced teams don’t them to get used to the because everything is done need as much discipline, discipline and the overall under the rules and because they probably system that is in place. For guidelines e.g. (Health and know what to do after they experienced members it could Safety). And the leader receive orders from the lead to competition for would have a clear structure first time and in the UPS, rewards between the of what he needs to do. That it is a common example experienced members and would help him to clearly like army. Inexperienced would result in outstanding see the goals and deliver teams might need some display of performance. For them to the team. With the discipline; because they both experienced and experienced team it could be 165 CU IDOL SELF LEARNING MATERIAL (SLM)

will go through team inexperienced team would be lack of flexibility and trust, development stages and a good leadership to use, because if the team is first stages are forming because it motivates and experienced, they could and storming that are quite encourages members to stick produce better results and confusing, so direct and with the rules and overall go beyond their regular clear commands would system. performance if they could help a lot. bend or bypass the rules. Size of the For big team leader would Big, medium or small size For big team’s bureaucratic team choose authoritarian teams would be affected with leadership style could be leadership, because a lot punishments and motivated challenging, because some Level of of people mean a lot of by rewards. Transactional of the team members might danger or opinions to be heard and it leader strictly supervises the be not happy about the rules situation can be quite hard to hear team even if it is big and it is and leader can receive all of them, so clear and hard to take control over them confrontation while trying to direct instructions would it will enforce the rules and enforce the rules on the be perfect for large group the overall system. team. And because lack of of people. For small flexibility bureaucratic groups you wouldn’t leader could absolutely lose necessarily use this style control over the group. But unless you have time for smaller teams that limitations. It is easier to should not be a problem and send message across for leader could have a less small group of people. intense environment. If in the situation someone If situation is dangerous, this Because lack of flexibility, is in danger it would be leadership style might not be bureaucratic leader can be effective to use the best one but in terms of not effective. Rules and authoritarian leadership being task oriented, it will be guidelines are not always and give direct commands more effective than being right decision to solve the instead of trying to discuss people oriented, because it problems. So different the situation, punish or focuses on the actual danger occurring situations could motivate team with that is present instead of confuse the leader and he rewards. discussing the situation and might lose the respect from thinking how could we team members. It is improve team performance important to evaluate the situation and adapt to it 166 CU IDOL SELF LEARNING MATERIAL (SLM)

for the next dangerous time. instead of strictly going with guidelines even if it doesn’t make any sense. Advantages Leader maintains order Focuses on the group Bureaucratic leader is and discipline and is performance and is organized. familiar with the rules and capable to make decisions Direct and clear instructions guidelines, so there is as soon as they need to be and clear overall goal. minimal chance of him done. Good to use both Motivating team with rewards making mistakes in terms of with experienced and and having clear expectations it. Leader will always keep inexperienced team and of what should be done. to the standards and will not under time pressure. produce unpleasant surprises. Disadvantages Team members may feel Not receiving input from the Lack of flexibility can cause that they have no group and only basing confusion or even lead to responsibility and this decisions according to the serious consequences, could cause them to system. Transactional leaders because they are not provide lack of creativity can be lack of flexibility. familiar with the situation and initiative, because Sometimes can be quite harsh and it is not written on the they are told to do it. Also, to team members and this rules or guidelines. Because team members might not could affect their efforts and everything is lead like to be ordered and will overall performance. accordingly to the rules, not put as much energy as leader might be they could. disconnected with the team and they could feel not important. That could have an impact to the whole team performance. Table 10.2 Comparison between People oriented Leadership People Oriented Leadership 167 CU IDOL SELF LEARNING MATERIAL (SLM)

Factors/Styles Democratic Laissez-Fiare Transformational Urgency of a Democratic leadership could You wouldn’t use this style Could be a good idea to task or time not keep up with the time if there would be a strict motivate the team and pressure pressure, because it takes a deadline and you know that support even if the task is lot of time to discuss and your team is inexperienced. urgent. That would help to evaluate the situation, hear Only if you know that your achieve better performance. everybody’s opinions and team is capable of doing it, But you would use only views. You would use this has plenty of knowledge transactional leadership for leadership if you have and you can trust them. urgent tasks unless it is plenty of time and want Otherwise inexperienced mixed with one of the task- your team to collaborate team can cause leader big oriented leadership styles like toward achieving the goals. trouble even though most authoritarian. Then you of the responsibility lies on would give direct and clear the team, but leader is commands also encouraging responsible for not leaving them during the task. them to do task alone. Experience of Inexperienced members can If your team is experienced For inexperienced and team members have less input towards the and you know that they experienced teams, it is task when discussing and have required skills and always good to share your sharing ideas, but it still knowledge this style is vision and try to sell it to would be useful to hear each appropriate if you want to your team. Having that one of them if there is see the bigger picture of influence both inexperienced plenty of time. If team is the events. Inexperienced teams will want to learn to do experienced it is really team could cause trouble, particular tasks and useful to approach team because a lot of experienced teams will want with this leadership, because responsibility lies on them to achieve best results out of you can gain lots of and if they don’t have it to be closer to the final knowledge and intelligence enough knowledge and goal. from them. skills, they will probably fail the task, so you should supervise them and guide them during the task. Size of the Size of a team could affect For this style a size of a Size of a team for team leader’s performance and team is not a major factor, transformational leadership is delivery of his plan. The because you just give out not a major factor, because a smaller the team the easier it the task and team will good transactional leader can will be to come up with the work upon it even if it is send his vision even upon the solution, the bigger the team small or it is big, whilst nations and make them the longer it will take and it you look at the big picture believe it is a right way. And 168 CU IDOL SELF LEARNING MATERIAL (SLM)

can even lead to conflicts if and carry on doing more it is even easier with the leader has lost control over important stuff. Unless it smaller teams to have that the group. would be more difficult to influence. But it is also trust high volume of people important that the vision if you know that they are makes sense. inexperienced. Level of If the situation is dangerous You would not use this You could use this style as danger or it is bad idea to use style if the situation side style if situation involves situation democratic approach involves any danger. You any danger with other task- towards the team, unless have to supervise, show oriented style which would you have plenty of time to initiative and have lots of be the main one to lead the discuss tactics. Otherwise influence upon a team in team. So, during the task you would use one of the dangerous situations. team you would have clear task-oriented leadership Using this style in and direct instructions also styles to focus your team dangerous situation could with encouragement and straight onto point. get someone injured or support. That would increase killed. overall performance. Advantages Team can come up with Gives team more Inspires and motivates people more than one solution to experience to be making them to perform the problem and it will be independent and work on better, because not they are easier for leader to have their own. Motivates them told to, but because they want more options and decide as they can have a lot of to – and it is really which solution is the best. influence upon the end important. Leader also cares Also having input from the result of the task. And about his team and supports it whole group will gain gives leader the during the work by that respect for leader. opportunity to look at the creating good relationship big picture or do other with the team. stuff. Disadvantages Discussing and evaluating Arguments between team Goals and targets that are in the situation can take a long members could take place, leader mind are not always time. And intense because during the work right and sometimes can be discussions can transform there would be no clear even delusional. If team will into arguments. That would leader that would take final not see the progress and result in discomfort in the decision. And also, team results, but will still receive whole team. members could be not plenty of enthusiasm it will serious when doing the tire them up and they will task, because they know lose motivation, by that that nobody is supervising making the leader ineffective. them. 169 CU IDOL SELF LEARNING MATERIAL (SLM)

TRAITS OF A LEADER Leaders set direction for others and use management skills to guide people to the right destination, in a smooth and efficient way. Good leaders will have the following characteristics: Awareness: Leadership is about understanding, because leaders understand the nature of differences between worker, supervisor and manager and accept it. Leadership traits are demonstrated in their image, their actions, and their communication. They conduct themselves in a way that sets them apart from their employees and not in a manner that suggests they are better than others. Leadership behaviour shows an objective perspective on everything that is going on in their organization. Decisiveness: All leaders must make tough decisions as required by the situation and job. They understand that in certain situations, difficult and timely decisions must be made in the best interests of the entire organization, decisions that require a firmness, authority, and finality that will not please everyone. Extraordinary leaders do not hesitate in such situations. They also know when not to act unilaterally but instead foster collaborative decision-making. Empathy: Talented leaders show empathy by solving problems in private and praising efforts of others in public. Empathy is shown by guiding employees during challenges. Good leaders do not blame others or individuals and does not make an official interaction as personal. Using empathy, leaders strive for constructive solutions and focus on achieving objectives. Accountability: Good leaders take accountability for their actions and assume responsibility for everyone’s performance including their own. Because leaders assume accountability, they resolve issues quickly and monitor the effectiveness of tasks done by them and by others. Confidence: Confidence is another leadership characteristic and behaviour. Through confidence leaders make employees follow them and in turn the employees feel confident themselves. Confident leaders when challenged do not given in easily because they have clarity of thought, their ideas and strategies and are aware on the amount of work required to achieve their tasks. Confident leaders are also quick to improve on their weaknesses or when something is wrong, they take steps to rectify the situation. Optimism: The very best leaders are source of positive energy. Optimistic leaders communicate more easily. They are inclined to help intrinsically and show genuine concern for the welfare of others. Optimistic leaders are also quick to identify solutions and know how to inspire people with reassurance. These leaders organize people by consensus and get people to work together effectively. Honesty: Honesty is another important trait for leadership. Honest leaders treat people genuinely and know how they must be treated. These leaders have ethical conduct and are reliable with lot of values. Honest leaders share information correctly and avoid misinformation. 170 CU IDOL SELF LEARNING MATERIAL (SLM)

Focus: Good leadership characteristic is to plan ahead and to organize well. Such people are focused and think through multiple scenarios and possible impacts for their decisions. Focused leaders consider viable alternatives for strategies towards success. Inspiration: A truly inspiring leader is someone who communicates clearly, concisely, and often, and by doing so motivates everyone to give their best all the time. They challenge their people by setting high but attainable standards and expectations, and then giving them the support, tools, training, and latitude to pursue those goals and become the best employees they can possibly be. LEADERSHIP STYLES Before we delve into describing leadership styles, it would be proper to distinguish between types of leaders and styles of leadership. Type of leader is determined and identified by the “personality” displayed by the leader in terms of core trait along with other traits and personal qualities being displayed and used to gain the trust of the people and lead them to commit to undertake the major task facing the organization. On the other hand, “style” of leadership is defined and identified by the competencies and skills that the leader “applies” to guide facilitate and support the people of the organization in their efforts to accomplish the task. Leadership style reflects a leader’s decision-making behaviour. It is the result of the philosophy, personality and experience of the leader. Leadership style refers to how decisions are made to providing direction, implementing plans, and motivating people. Three major leadership styles are: 1. Authoritarian or Autocratic 2. Participative or Democratic 3. Free-rein or Delegate 171 CU IDOL SELF LEARNING MATERIAL (SLM)

Authoritarian Style: When the leaders tell their subordinates/followers at their own what work they want to get done, and how – it is known as authoritarian or autocratic leadership style. It works well if the leader is competent and knowledgeable enough to decide about each and every thing. All decision-making powers are centralized in the leader, as with autocratic leaders. No suggestions or initiatives from subordinates are acceptable. Authoritarian or autocratic leadership does not mean using foul language and leading by threats. This unprofessional style is known as “bossing people around”. This style should be used only when the leader has all the information and is short of time and the employees are well motivated. If the leader wants to gain greater commitment and motivate his subordinates, then it should be used very rarely. 172 CU IDOL SELF LEARNING MATERIAL (SLM)

Participative Style: In the authoritarian style the leader used to say – “I want you to….”, but in participative style the leader says – “let us work together to solve this problem”. A Participative Leader, rather than taking autocratic decisions, seeks to involve other people including subordinates, peers, superiors and other stakeholders in the process. Here the leader takes his subordinates into confidence about what to do and how to do, but the final authority vests in the leader. This style can be divided into two – one, where leader consults, and two, where decision is taken through consensus. Use of this style by a leader is not a sign of weakness. It is the strength; your subordinates will respect. This style is used when the employees are knowledgeable and skillful. This style is also known as consultative, empowerment, joint decision- making, democratic leadership, Management by Objective (MBO) and power-sharing. It helps in ascertaining and identifying future leaders among the subordinates. Also, it keeps a team’s spirit and morale high, as the team members feel that their opinions are valued by their leader. To illustrate, an advertising manager approaches his subordinates on how to promote a particular product of a company. The team members brain storm over the issue, some suggest print media and others suggest electronic media. The participative leader takes all these suggestions, and makes a decision after weighing their pros and cons. Free-rein Leadership Style: In this style the leader says – “you take care of the problem”. Final responsibility always remains with the leader. A free-rein leader does not lead, but leaves the group entirely to itself. Such a leader allows maximum freedom to subordinates, i.e., they are given a free hand in deciding their own policies and methods. It is used when the leader has full trust and confidence in the abilities of his subordinates. Since a leader cannot do everything. He prioritizes the work and delegates certain tasks. This style may be used but with caution. This style is also known as laissez faire (non-interference in the affairs of others). To illustrate, a manager has newly joined a firm. He is still learning how various things move in the organization. In such a situation, he relies on the suggestions and opinions of his team members and lets them do the things the way they are used to, till the time he is able to gain sufficient knowledge and can suggest some more feasible changes. 173 CU IDOL SELF LEARNING MATERIAL (SLM)

Forces influencing the Styles: 1. Availability of time 2. Relationships between leader and subordinates (based on trust or on disrespect?) 3. The information is with whom (the leader, employees or both? If the leader knows the problem but does not have all the information – use participative style) 4. How well the leader knows the task and employees well versed? (Use participative style if the employees know the job well) 5. Internal Conflicts 6. Levels of stress 7. Type of task (structured, unstructured, complicated or simple?) 8. Systems and procedures (are they well established?) 9. If an employee is just learning the job – use authoritarian style, and if employees know more than the leader about the job use free-rein style) Good leaders should be able to master all the styles, to be a better leader. He must be able to use all the styles depending upon the forces in operation among the leader, followers and the situation. If the existing procedure is not working go in for authoritarian to establish a new one; if their ideas and input are to be taken use participative and using delegative style while delegating the procedure to them for execution. Normally one of styles will be dominant. But bad leaders tend to stick to one style only. Before deciding which style to use, a leader should ask two questions, the first is to ask what my leadership style is. This is to focus on what you enjoy, what you might be good at, what strengths and weaknesses you have. The second is to ask what leadership style is best for the people, team or organization that I’m leading. This is to focus on the needs of the situation, on the criteria for success, on the approach that will bring about the maximum impact. Modern leadership demands both. 174 CU IDOL SELF LEARNING MATERIAL (SLM)

SUMMARY Leadership is a broad term in psychology and in analysing human behaviour. Leadership qualities are found in almost every human being to satisfy their wants and needs. Leadership is the study of qualities of leaders. Leaders have many followers which is opposed to the idea of a manager. Leadership is setting a new direction, developing a new and simplified method to achieve goals for an organization, and at the same time ensuring a dynamic and exciting environment for people to feel motivated and work. The unit explains the importance of leadership and discussed for leadership behaviour. Leadership behaviour is demonstrated through certain characteristics that individuals show in their interactions. The characteristics of leadership and leaders are also explored. Since leadership deals with human behaviour, humans have different styles. Leadership is highly essential which helps organizations to sustain, achieve growth and performance in competitive environments. KEY WORDS/ABBREVIATIONS • Leader: A person who is capable of influencing the group in its activities. • Leadership: The process of influencing group activities towards the achievement of certain goals. • Leadership Style: The dominant behaviour pattern of a leader-manager in relation to his subordinates. • Authoritarian or Autocratic: When the leaders tell their subordinates/followers at their own what work they want to get done, and how – it is known as authoritarian or autocratic leadership style. • Participative or Democratic: A Participative Leader seeks to involve other people including subordinates, peers, superiors and other stakeholders in the process. • Free-rein or Delegate : Free-rein leadership, also called Laissez-Faire, is a type of leadership style in which leaders are hands-off and allow group members to make the decisions. LEARNING ACTIVITY 1. Define 'leadership style'. ………………………………………………………………………………………………………. ………………………………………………………………………………………………………. 2. What are the main differences between autocratic, democratic and free rein leadership styles? ………………………………………………………………………………………………………… ……………………………………………………………………………………………………........ 175 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT END QUESTIONS (MCQ AND DESCRIPTIVE) A. Descriptive Types Questions 1. Describe Charismatic leadership and Transformational leadership with relevant examples. 2. Explain compare the various styles of leadership. 3. Analyse the different traits in effective leadership. 4. “A good leader is one who understands his subordinates, their needs and their sources of satisfaction”. Comment. 5. Critically examine the different approaches to the study of leadership behaviour. Is there one best style of leadership? 6. “Leadership is the driving force which gets thing done by others”. Discuss. 7. “A Successful Leader is not necessarily effective”. Comment. 8. Which is your favourite leadership style and why? B. Multiple Choice Questions 1. An effective leader in order to derive maximum outcomes in a given situation will adapt to new surroundings and situations, doing his/her best to adjust is known as: Respectful characteristic Enthusiastic characteristic Flexible and adaptable character Open minded All of the above 2. A best leader guides employee through challenges, always on the lookout for solutions to foster the long-term success of the organization. This quality is known as: Confidence Empathy Decisiveness Optimism All of the above 3. The hypothesis that ‘great leaders are born and note made’ is known as the theory of a. Great Man b. Trait c. Situational d. Participative e. None of the above 176 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Fiedler’s model proposes that leadership style corresponds to Leader is autocratic Task structure in the organization# Democratic style Leader is either task oriented or relationship oriented None of the above 5. The old saying, “Pessimism breeds negativity. Optimism breeds opportunity” refers to a. Positive orientation b. Persistence c. Patience d. Appreciation e. None of the above Answer Keys 1. c) 2. b) 3. a) 4. d) 5. a) REFERENCES • Koontz, O Donnel and Weirich. (2001). Principles of Management. New Delhi: Tata McGraw Hill Publishing Company. • Chopra, R.K. (2005). Principles & Practices of Management. New Delhi: Sun India Publication. • Tripathi, P.C., and Reddy, P.N. (2006). Principles & Practices of Management. New Delhi: Tata McGraw Hill Publishing Company • Anne Bruce and James S. Pepitone, Motivating Employees, McGraw-Hill. • Barry Silverstein, Motivating Employees: Bringing Out the Best in Your People, Collins Business. • P.G. Aquinas, Organisational Behaviour, Excel Books. • The Psychology of Leadership, David M Messick, Roderick Moreland Kramer, Routledge • Transformational Leadership in Government, Jerry W Koehler, Joseph M Pankowski, CRC Press • www.accel-team.com • www.motivation-tools.com • www.pickthebrain.com 177 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT –11 CONTROLLING Structure 11.0.Learning Objectives 11.1.Introduction 11.2.Meaning 11.3.Importance 11.4.Types of control 11.5.Process of controlling. 11.6.Summary 11.7.Key Words/Abbreviations 11.8.Learning Activity Unit End Questions (MCQ and Descriptive) References LEARNING OBJECTIVES After studying this unit, you will be able to: • State meaning of controlling • Explain importance of controlling • Identify types of control • Discuss process of controlling INTRODUCTION Controlling is an important function of management. It is the process that measures current performance and guides it towards some predetermined objectives. Under primitive management, control was undertaken only when something went wrong and the objectives of control was to reprimand the person responsible for these events and take action against him. The modern concept of control envisages a system that not only provides a historical record of what has happened to the business as a whole but also pinpoints the reasons why it has happened and provides data that enable the manager to take corrective steps, if he finds he is on the wrong track. Therefore, there is no intention to punish the person for wrong doing, but to find out the deviations between the actual performance and the standard performance and to take steps to prevent such variances in future. The concept of control is often confused with lack of freedom. The opposite of control is notfreedom but chaos or anarchy. Control is fully consistent with freedom. In fact, they are interdependent. 178 CU IDOL SELF LEARNING MATERIAL (SLM)

Without control, freedom cannot be sustained for long. Without freedom, control becomes ineffective. Both freedom and accountability are embedded in the concept of control. MEANING OF CONTROL Control is the process through which managers assure that actual activities conform to planned activities. According to Breach, \"Control is checking current performance against predetermined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performance.\" According to George R. Terry, \"Controlling is determining what is being accomplished i.e., evaluating the performance and if necessary, applying corrective measures so that the performance takes place according to plans.\" According to Billy E. Goetz, \"Management control seeks to compel events to conform plans\". According to Robert N. Anthony, \"Management control is the process by which managers assure that resources are obtained and used effectively and efficiently.\" In the words of Koontz and O'Donnell, \"Managerial control implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans.\" In the words of Haynes and Massie, \"Fundamentally, control is any process that guides activity towards some predetermined goal. The essence of the concept is in determining whether the activity is achieving the desired results\". In the words of J. L. Massie, \"Control is the process that measures current performance and guides it towards some predetermined goals.\" In the words of Henry Fayol, \"Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and the principles established. Its object is to find out the weakness and errors in order to rectify them and prevent recurrence. It operates on everything, i.e., things, people and actions\". From the above definitions it is clear that the managerial function of control consists in a comparison of the actual performance with the planned performance with the object of discovering whether all is going on well according to plans and if not why. Remedial action arising from a study of deviations of the actual performance with the standard or planned performance will serve to correct the plans and make suitable changes. Controlling is the nature of follow-up to the other three fundamental functions of management. There can, in fact, be not controlling without previous planning, organising and directing. Controlling cannot take place in a vacuum. 179 CU IDOL SELF LEARNING MATERIAL (SLM)

IMPORTANCE OF CONTROL The importance of control in management is provided below: i. Controlling reduces risk: Control eliminates the risk of non-conformity of actual performance with the main goals of the organisation. Control is the function which regulates the operation to ensure the attainment of the set objectives. Regular measurement of work in progress with proper alterations in operations puts the performance on the right track and helps in the achievement of goals. ii. Control is the basis for future action: Control provides information and facts to the management for planning and organizing when the work is completed and the result is evaluated. In fact, evaluation of results helps the management replant for non-repetitive operations and rewarding, punishing and discipline the workers. It would be better to say that future long-term planning is not possible unless and until control information is available in time to the managers for the operation of work. iii. Control helps to size the business: In large scale business in the modem times it is quite impossible to work without proper policies, procedures and quality of different varieties of goods. In order to overcome this problem, large organizations follow a scientific system of control to solve the day to day problems. iv. Control is an indicator for managerial weakness: In the organisation there will be certain unforeseen and unknown problems which cannot be traced out by mere planning, organizing and staffing efforts. It is the control process that can trace these out. That is why it is known as an indicator of the managerial weakness. Control not only finds out the weakness of managers but also provides solutions and remedial action to solve problems. v. Facility of co-ordination: Management and co-ordination of business activities and workers is a very important role. It binds all the workers and their activities and motivates them to move towards the common objectives through co-ordination. Control will play the role of a middleman between the workers and management to provide the required information in time to the workers. vi. Control simplifies supervision: A systematic system of control helps in finding out the deviation existing in the organisation which simplifies the task of the supervisor in managing his/her subordinates. So, through control it becomes simpler for the supervisor to supervise and guide the workers to follow the right track and fulfil the required goals. vii. Control provides extension for decentralization: Control system helps the top management to extend the frontiers of decentralization without the loss of control. When proper procedures, 180 CU IDOL SELF LEARNING MATERIAL (SLM)

policies, targets, etc, are clearly communicated to the subordinates, they develop self- confidence and need not always refer to their supervisors with the problems. TYPES OF CONTROL Control can focus on events before, during or after a process. For example, local automobile dealer can focus on activities before, during, or after sales of new cars. Careful inspection of new cars and cautious selection of sales employees are ways to ensure high quality or profitable sales even before those sales take place. Monitoring how salespeople act with customers is a control during the sales task. Counting the number of new cars sold during the month and telephoning buyers about their satisfaction with sales transactions are controls after sales have occurred. These types of controls are formally called feed-forward and feedback, respectively. Feed Forward controls: This is also sometimes called preliminary or preventive controls, attempt to identify and prevent deviations in the standards before they occur. Feed forward controls focus on human, material, and financial resources within the organization. These controls are evident in the selection and hiring of new employees. For example, organizations attempt to improve the likelihood that employees will perform up to standards by identifying the necessary job skills and by using tests and other screening devices to hire people with those skills. Feedback controls: Feedback controls involve reviewing information to determine whether performance meets established standards. For example, suppose that an organization establishes a goal of increasing its profit by 12 percent next year. To ensure that this goal is reached, the organization must monitor its profit on a monthly basis. After three months, if profit has increased by 3 percent, management might assume that plans are going according to schedule. PROCESS OF CONTROLLING Following are the steps involved into the process of control: 1. Establish the Standards: Within an organization’s overall strategic plan, managers define goals for organizational departments in specific, precise, operational terms that include standards of performance to compare with organizational activities. However, for some of the activities the standards cannot be specific and precise. Standards, against which actual performance will be compared, may be derived from past experience, statistical methods and benchmarking (based upon best industry practices). As far as possible, the standards are developed bilaterally rather than top management deciding unilaterally, keeping in view the organization’s goals. 181 CU IDOL SELF LEARNING MATERIAL (SLM)

Standards may be tangible (clear, concrete, specific, and generally measurable) – numerical standards, monetary, physical, and time standards; and intangible (relating to human characteristics) – desirable attitudes, high morale, ethics, and cooperation. 2. Measure Actual Performance: Most organizations prepare formal reports of performance measurements both quantitative and qualitative (where quantification is not possible) that the managers review regularly. These measurements should be related to the standards set in the first step of the control process. For example, if sales growth is a target, the organization should have a means of gathering and reporting sales data. Data can be collected through personal observation (through management by walking around the place where things are happening), statistical reports (made possible by computers), oral reporting (through conferencing, one-to-one meeting, or telephone calls), written reporting (comprehensive and concise, accounting information – normally a combination of all. To be of use, the information flow should be regular and timely. 3. Compare Performance with the Standards: This step compares actual activities to performance standards. When managers read computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparison by placing the performance standards for the reporting period alongside the actual performance for the same period and by computing the variance—that is, the difference between each actual amount and the associated standard. The manager must know of the standard permitted variation (both positive and negative). Management by exception is most appropriate and practical to keep insignificant deviations away. Timetable for the comparison depends upon many factors including importance and complexity attached with importance and complexity. 4. Take Corrective Action and Reinforcement of Successes: When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and quality-centred environment, workers and managers are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth step— corrective action. The corrective action may be to maintain status quo (reinforcing successes), correcting the deviation, or changing standards. The most effective course may be prescribed by policies or may be best left up to employees’ judgment and initiative. The corrective action may be immediate or basic (modifying the standards themselves). 182 CU IDOL SELF LEARNING MATERIAL (SLM)

SUMMARY Controlling is an important performance standard often stated in monetary terms. In organizations revenue, costs, or profits but may also be stated in other terms of units produced, number of defective products, or levels of quality or customer service. Managers at all levels engage in the managerial function of controlling to some degree. The managerial function of controlling is different from control in the behaviour of a person. The unit discusses the aspects of controlling. Controlling is an important function of management related to the manager’s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives. Effective controlling requires comprehensive planning, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. The management function of controlling is widely considered to be the best means of describing the manager’s job, as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers perform controlling activity which is an essential function for the organization. KEY WORDS/ABBREVIATIONS • Control: Restrain or regulate • Feedback: The process in which part of the output of a system is returned to its input in order to regulate its further output • Feed Forward: Reverse of a feedback, it is the 'self-fulfilling prophesy' process that turns logical cause-effect relationships upside down. LEARNING ACTIVITY 1. State definition of controlling as per George R. Terry & Robert N. Anthony ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 2. What are feed forward and feedback controls? Give examples ………………………………………………………………………………………………........…… ………………………………………………………………………………………………................ 183 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT END QUESTIONS (MCQ AND DESCRIPTIVE) A. Descriptive Types Questions 1. Define controlling. What is importance of controlling function in management? 2. State meaning of control. Explain types of control with examples. 3. Why is control a must in business management? What are the requirements of an effective control system? 4. \"The essence of control is action\". Comment. 5. \"The controlling function of management is similar to the function of the thermostat in a refrigerator\". Comment. 6. Planning and control are after thought of as a system; control is also often referred to as a system. What is meant by this? Can both statements be true? B. Multiple Choice Questions 1. The function of management under which every manager at every level assures that the actual progress is in conformity with the plans is known as Functional management Continuous activity Essential function of a manager Beginning and end of management None of the above 2. The control system helps the top management to extend frontiers of decentralization without the loss of control is known as a. Extension of decentralization b. Simplified supervision c. Determine size of business d. Basis for future action e. All of the above 3. The organisation can supply good quality products at lower prices. This increases the a. Customer base b. Optimal use of resources c. Motivation of employees d. Overall goodwill e. None of the above 184 CU IDOL SELF LEARNING MATERIAL (SLM)

4. In the controlling process the concern related to correction of deviations from standard performance is known as a. Do nothing b. Revise the standard c. Solve the problem d. Compare actual performance to standard e. All of the above 5. The process of managers preparing the budget and sending it to subordinates is known as a. Flexible budgeting b. Zero based budgeting c. Bottom up budgeting d. Budget control e. Top down budgeting Answer 2. a) 3. d) 4. c) 5. e) 1. c) REFERENCES • Koontz, O Donnel and Weirich. (2001). Principles of Management. New Delhi: Tata McGraw Hill Publishing Company. • Chopra, R.K. (2005). Principles & Practices of Management. New Delhi: Sun India Publication. • Tripathi, P.C., and Reddy, P.N. (2006). Principles & Practices of Management. New Delhi: Tata McGraw Hill Publishing Company • Adhiraj (2012). Management Control Systems: An Overview. • Banerjee, Arthita (2012). What is the importance of control in management? • Bedeian, Arthur G., (1986). Management. 2nd ed. Canada: Holt, Rinehart & Winston of Canada Ltd; International Revised edition. • Benowitz, Ellen, (2001). Principles of Management. New York: Hungry Minds. • Jerry Billy E. Goetz, Management Planning and Control, McGraw-Hill, New York, 1979. • Joan Woodward (ed.) Industrial Organisation, Behaviour and Control, Oxford University Press, London, 1970. • Paul E. Holden, L.S. Fish, and Hubert L. Smith, Top Management Organisation and Control, McGraw-Hill, New York, 1981. • P.G. Aquinas, Organisational Behaviour, Excel Books, New Delhi. 185 CU IDOL SELF LEARNING MATERIAL (SLM)

• Scanlon Burt K., Principles of Management and Organisation Behaviour, John Wiley and Sons, 1973. • Tom K. Reeves and Joan Woodward, The Study of Management Control. • https://www.managementstudyguide.com/controlling_function.htm • https://www.managementstudyhq.com/importance-steps-controlling-function- management.html 186 CU IDOL SELF LEARNING MATERIAL (SLM)