OLIVAREZ COLLEGE

GRADUATE SCHOOL

MASTER IN BUSINESS ADMINISTRATION

Leading
Basic Functions of Management

Presented by:

ARIEL A. CATAPAL
MBA, OLIVAREZ COLLEGE
1ST Semester
S.Y. 2009 – 2010

Course Title: BA 201 MANAGEMENT PRINCIPLES AND DYNAMICS

Professor: MR. ERNESTO M. APODACA

 ACKNOWLEDGEMENT

I would like to acknowledge and extend my heartfelt gratitude to the following persons

who have made the completion of this Assignment possible:

Our Dean of Graduate School, Dr. Eric L. Olivarez, for his vital encouragement and
support.Dr. Avelino S. De Chavez, our Assistant to the Dean of Graduate School, for his
understanding and assistance.

Miss Bernadette Uy, Secretary of Graduate School, for the constant reminders and
much needed motivation.

Mr. Ernesto M. Apodaca, our Professor in BA 201 Management Principles and

Dynamics for the continuing help and support and inspiration he extended.

All the Graduate School, faculty members and Staff.

Most especially to my family and friends.

And to GOD, who made all things possible.

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TABLE OF CONTENTS

I. INTRODUCTION

II. DEFINITION OF LEADERSHIP

III. APPROACHES TO LEADERSHIP

1. TRAIT

2. BEHAVIORAL

3. CONTINGENCY

I. LEADERSHIP AND POWER

II. LEADERSHIP AND EMPOWERMENT

III. PRINCIPLES OF LEADERSHIP

IV. MOTIVATION

V. THEORIES OF MOTIVATION

1. NEED

2. EQUITY

3. EXPECTANCY

4. REINFORCEMENT

5. GOAL-SETTING

I. SUMMARY

II. BIBLIOGRAPHY

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 Leading: an Introduction

As one of the four basic functions of management, leading can be both extremely

important and challenging. Along with planning, organizing and controlling, all managers

will execute these four functions of management. From managing a local store to

managing a large corporation, every manager will perform each of the functions at some

point in their jobs.

Leading Means Inspiring

A manager should strive to become an inspiration to the rest of the employees.

Employees will follow a manager because the manager is the boss. However, a

manager that is an inspiration means that employees follow that person because they

believe in what the manager is doing and they are trying to help the company achieve

its goals. Finding ways to inspire employees means coaching them and motivating them

to succeed as integral parts of the company.

Leading Affects Morale

The way a manager leads greatly affects employee morale within the department and

company as a whole. Managers should create a climate that encourages new ideas and

employee input. The more the employees feel that they have a say in the company, the

more they will be wiling to share ideas and attempt to find better ways to improve

processes. For example, a good manager may reward employees with monetary or

benefit incentives if they can increase output of a product. Another idea is a treasure

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box of goodies. Managers can set a goal early in the week and employees who meet

the goal by the end of the week are allowed to take a prize from the treasure box.

Leading is Key to Effective Communication

For a manager to be an effective leader, he or she must also be an effective

communicator. A manager that shares information and lets employees know the latest

news in the company is someone that is deemed trustworthy by his or her employees.

Employees feel little loyalty or trust towards a manager who does not readily give out

information.

Leading Effectively Contributes More to the Bottom Line

An effective leader inspires employees, which allows those employees to feel like they

are making a meaningful contribution to the company. Satisfied employees generally

work harder and take more ownership in their job positions. This can mean happy

customers and a higher level of customer service.

Definition of Leadership
LEADING

The third function of management is leading. It is possible said that this function having

the unique characteristic comparing to other functions. The leading function employ the

humanistic perspective and require less systematic process for analytical as other

functions. The leading function recently can be called: Leading – to Inspire Effort. First

of all, we must understand the keyword of the function. “Leadership”

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Today…Leadership

The face of leadership is changing, because the business’s environment. Today,

managers must make quicker, more accurate decisions in a consensus building and

teamwork environment.

Definitions

1. Leadership is a complex process by which a person influences others to

accomplish a mission, task, and objective and directs the organization in a way

that makes it more cohesive and coherent.

2. Leadership is the ability to influence a group towards the achievement of goals.

3. Leader creates the memory & shadows of leadership create a certain

atmosphere or climate. Leaders not only face to face impact on people.

As the study about leadership is being more emphasize during 50 years and the way

leader performs their work was directly affect by the environmental setting as follows:

Definition of leadership during 50 years

1. Leadership is “ the behavior of an individual… directing the activities of a group

toward a shared goal” (Hemphill & Coons, 1957)

Explanation: During the 1950s review leadership as the behavior for

directing activity in organization. Then the next 20 year, the leaders still be

someone who carry on the routine directive in organization.

2. Leadership is the influential increment over and above mechanical compliance

with the routine directives or organization (Katz & Kahn, 1978)

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 Explanation: However, in 1980s review leadership as the process, which

mean the Leadership study is being more systematic.

3. Leadership is the process of influencing the activities of an organized group

toward goal achievement (Rauch & Behling, 1984)

Explanation: In 1990, Leadership was reviewed as the process that not

only managers have to direct, but also, he shares idea and commitment

from staff in organization. Leader is the change agent in organization.

4. Leadership is a process of giving purpose (Meaningful direction) to collective

effort, and sourcing willing effort to be expanded to achieve purpose (Jacob &

Jaques, 1990)

5. Leadership…Is the ability to step outside the culture…? To start evolutionary

change process that are more adaptive(Schein, 1992)

6. Leadership is the process of making sense of what people are doing together so

that people will understand and be committed (Drath & Palus, 1994)

What is Leadership?

• Leadership and Vision

○ Leadership

 process of inspiring others to work hard to accomplish important

tasks

○ Vision

 someone who has clear sense of future

Approaches to Leadership
Leadership Theories
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 • The leadership literatures are voluminous, and much of is confusing and

contradictory. We can separate it into 3 leading theories to explain how people

become leaders.

• The first one explains the leadership development for a small number of people

which is the Trait Theory (Some personality traits may lead people naturally into

leadership roles.)

• Search for Leadership Traits.

• For person that inherits the ability for being a leader might have the following

traits.

○ drive

○ desire to lead

○ motivation

○ honesty and integrity

○ self-confidence

○ intelligence and knowledge

○ flexibility

Trait theories

• For the trait theory, Myers-Briggs: Type Indicator (MBTI) have identify

there are 16 personality types of people whose have different styles and

level for being leader. The Myers-Briggs theory is compound of.

○ Extraverts VS Introverts

○ Sensers VS iNtuitives

○ Thinkers VS Feelers
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 ○ Judgers VS Perceivers

• For example the ENFJ is an outstanding leader of groups, both task

groups and growth groups. ..Found in only about 5% of population the

most rarely to find in the personality trait. However there are some

awareness as followed,

Awareness

 Trait alone are not sufficient for explain leader. It’s depend upon action

that it’s right or not.

 Western scholars developed many Leadership theories. So it’s might

hardly to explain leader in Asian countries.

 Leader is related to power, leaders without power are really not leaders

because they have no chance to influence anyone to do anything. Leaders

in organization normally derive much of their power from their formal

opposition and the ability to allocate reward. In some cases, leaders may

have expert are referent power depend upon their individual charismatic.

Behavioral Theories

To find out what's manager do or exhibit on the job and compare action of manager.

The behavioral theory differs to trait theory in terms of the application terms. For trait

theory: the leader is naturally born but behavioral theory is something that we can train.

Many schools study about behavioral theory as follows.

• Ohio State Studies

• The most comprehensive and replicated of the behavioral theory result

form research that began at Ohio State University in the late 1940’s. The

study sought to identify independent dimensions of leader behavior. And

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 formed the 2 categories that substantial accounted for most of the

leadership behavior describe by subordinate which called Initiating

structure and Consideration

• Initiating structure

• Is leading behavior whereby the person organizes work

done.

• Consideration

 Leader behavior indicative or mutual trust friendship support

respect and warmth.

Behavioral Theories

University of Michigan Studies

The Michigan group also come up with two dimensions of leadership behavior which are

Employee -oriented, which associated with higher, group productivity and higher job

satisfaction.

Production- oriented which tend to be associated with low group productivity and low

worker satisfaction

• Participative and Autocratic styles (Kurt Lewin) Leadership style is the

manner and approach of providing direction, implementing plans and

motivating people., There are three different styles of leadership

• Participative- share problem with sub as a group

• Autocratic- solve problem and make decision by themselves based upon

information available.

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 • Delegative (Free reign, Laisez Faire) leader allows the employees to make

the decision However the leader is still responsible for the decisions that

are made use when employee can analyze the situation.

• Although most leaders use all three styles, one of them becomes the

dominate one for each person.

Behavioral Theories

• The managerial grid

• Robert Blake and Jane Mouton. They proposed a managerial grid based

on the styles of concern for people and concern for production, which

represent the Ohio State and Michigan dimension.

• the grid is one of the leadership model

• The leadership model help us to understand what makes leaders act the

way they do in certain situations, the deal is not lock yourself in a type of

behavior discussion

Leadership Models and Theories

• Focus on Leadership Behaviors

○ Task and People Concerns

 task concern

• plans and defines work to be done

• assigns task responsibilities

• sets clear work standards

• urges task completion

• monitors results
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 • Focus on Leadership Behaviors

○ Task and People Concerns

 people concern

• acts warm and supportive

• develops social rapport with them

• respects their feelings

• sensitive to their needs

• shows trust in them

Contingency Theories

Regarding to the awareness of behavioral theory. Thus, the theorists have to consider

the situations that reflex the leading style. That entitled "Contingency Theories".

Contingency Theories sometime we call it. (Situational Theories of Leadership)

There are sub-theories as followed.

1.Fiedler’s Contingency Theory of Leadership - Position power, task

structure, and leader-member relations.

2.Path-Goal Leadership Theory

• Expectancy theory of motivation.

3.Leader-Member Exchange Theory

• Using different styles of leadership with different members of the

same workgroup.

4.The situational Leadership Model

The Vroom Jago Yetton Model

The Four Framework Approach

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Leadership Models and Theories

• Fiedler’s Contingency Model

○ good leadership depends on a match between leadership and

situational demands

 least-preferred coworker scale (LPC)

○ Fiedler’s Contingency Model

 Diagnosing situational control

• leader-member relations (good or poor)

• degree of task structure (high or low)

• amount of position (strong or weak)

• Fiedler’s Contingency Model

○ Matching leadership style and situation

 task oriented leader is most successful

• very favorable (high control)

• very unfavorable (low control)

 relationship oriented leader is most successful

• moderate control situation

• Hersey-Blanchard Situational Model

○ Leaders adjust their styles depending on the readiness of their

followers

 readiness

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 • how able, willing and confident followers are to

perform tasks

Contingency Theories (Situational Theories of Leadership)

• There are 2 models of situational leadership.

• 1.The situational Leadership Model The situational leadership model of

leadership suggest that leadership should adapt his her leadership

style:Delegation, Participation, Selling and Telling to the task.

Leadership Models and Theories

• Hersey-Blanchard Leadership Styles

○ Delegating

○ Participating

○ Selling

○ Telling

Leadership Models and Theories

• Matching Hersey-Blanchard Leadership Styles to Follower Readiness

○ Delegating = high readiness

○ Participating = moderate to high readiness

○ Selling = low to moderate readiness

○ Telling = low readiness

• The Vroom Jago Yetton Model

• (Leader-participation model)

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 • they developed a leadership model that enables a leader to analyze a

situation and decide whether it is right for participation. The technique

includes a set of management decision styles, a set of diagnostic question

and a decision tree for identifying how much participation is called for a

situation.

Contingency Theories (Situational Theories of Leadership)

• Path-Goal Leadership Theory :

• Path Goal theory of leadership developed by House, is based upon

expectancy theory, which states whether a person will be motivated

depends on whether the person believes he/she has the ability to

accomplish a task and his her desire to do.The theory conclude that

leaders should increase the personal rewards subordinate receive for

attaining goals and make path of those goals easier to follow.The

leadership style depend upon the situation leader must flexible and adopt

the style that require.

Leadership Models and Theories

• House’s Path-Goal Leadership Theory

○ directive

○ supportive

○ achievement-oriented

○ participative

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Directions in Leadership Development

From the 3 theories, can form the Directions in Leadership Development as

follow

• What is Transformational Leadership?

○ Use of charisma and related qualities to raise aspirations and shift

people and organizational systems into new high-performance

patterns

• Transactional Leadership

○ Use of tasks, rewards and structures to help followers meet their

needs while working to accomplish organizational objectives

• Qualities of Transformational Leaders

○ vision

○ charisma

○ symbolism

○ empowerment

○ intellectual stimulation

○ integrity

• Emotional Intelligence (EI)

○ ability to understand and deal well with emotions at work

○ threshold capabilities are technical or knowledge-based skills

○ excellence in leadership depends on EI

○ can be learned

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Trends in Leadership Development

• Gender and Leadership (Dessler,G,Schermerhorn)

○ Women may be more prone to democratic and participative

behaviors

○ Men may be more transactional

Gender Differences

• Inaccurate stereotypes - Women generally seen as less capable leaders.

• Leader behaviors - Few measurable differences in behavior between men

and women managers.

• Performance - Women perform similarly to men.

• Gender advantage - Women often score higher on patience, relationship

development, and communication, all necessary leadership skills.

• Forces

• A good leader uses all three styles, depending on what forces are involved

between the followers, the leader and the situation. Some examples

include:

• new employee

• team worker show know their job

• Employee who know more about the job

• Using all three: Telling your employees that a procedure is not working

correctly and a new one must be establish (Authoritarian) Asking for their

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 ideas and input on creating a new procedure (Participative). Delegating

tasks in order to implement the new procedure (Delegative)

Leadership and Power

Leadership and Power

• Power

• ability to get someone else to do what you want them to

Position Power

• Reward

○ influence through rewards

• Coercive

○ influence through punishment

• Legitimate

○ influence through authority

Personal Power

• Expert

○ influence through special expertise

• Referent

○ influence through identification

Leadership and Empowerment

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Leadership and Empowerment

• Empowerment

○ Process through which mangers enable and help others to gain

power and achieve influence with in the organization.

○ when employees feel powerful they are more willing to make

decisions and take action

Building Trust: The Essence of Leadership

• Deterrence based trust

○ Trust based of fear

○ Knowledge base trust

○ Identification based trust.

○ Trust based on an emotional connection

○ Forces that influence that style to be used included a number of

things as

○ How much time is available

○ Are relations based on respect and trust or the disrespect

○ Who has the information

○ How well your employees are trained and how well you know the

task

○ Internal Conflicts

○ Stress levels

○ Type of task. Structure, unstructured, complicate or simple

○ Laws or established procedure.

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Becoming a Leader

• Start to think like a leader.

• Develop your judgment.

• Develop your other leadership traits.

• Start to build your power base.

• Help others share your vision.

• Adapt your style and actions to the situation.

• Use your other management skills to help you lead.

Two Most Important Keys of Leadership

➢ Hay's study examined over 75 key components of employee

satisfaction. They found that:

➢ Trust and confidence in top leadership was the single most reliable

predictor of employee satisfaction in an organization.

➢ Effective communication by leadership in three critical areas (to

understand organization, how to contribute to achieve key business

objective, sharing information with employee) was the key to winning

organization trust and confidence

Principle of Leadership
Principles of Leadership

➢ Know yourself and seek self-improvement

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 ➢ Be technically proficient

➢ Seek responsibility and take responsibility for your actions

➢ Make sound and timely decisions

➢ Set the example

➢ Know your people and look out for their well-being

➢ Keep your people informed

➢ Develop a sense of responsibility in your people

➢ Ensure that tasks are understood, supervised and accomplished

➢ rain your people as a team

➢ See the full capabilities of your organization.

• This individual perception of the feel of the organization comes from what

the people believe about the activities that occur in the organization.

These activities influence both individual and team motivation and

satisfaction. Such activities include:

Motivation
Motivation

Boons and Kurtz, 1992 categorize Motivation theory into 2 approaches.

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 1. Focus on the factors within the person that energize direct sustain and stop

behavior

• Maslow’s need hierarchy.(Five-level need hierarchy)

• Alderfer’s ERG theory. (three-level hierarchy)

• Herzberg’s two factor theory. (Called hygiene-motivators)

• McClelland’s 3 learned needs theory. (Acquired from culture:achievement,

affiliation & power)

2. Focus on Motivation Process To describes, explains and analyze how

behavior is energized direct sustained and stopped.

• Vroom’s VIE Expectancy. (an expectance theory of choice)

• Porter-Lawler’s Expectancy Theory of Motivation.

• Adam’s Equity Theory of work Motivation. (based on comparisons that

individual make)

• Lock’ Goal Setting Theory

• (Goal-setting theory that conscious goals and intentions are the detriments of

behavior.

• Skinner’s Bahavioristic Theory

Theories of Motivation
Factor within Person

Maslow’s need hierarchy

• Physiological. The need for food, drink, shelter and relief from pain
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• Safety and Security. The need for freedom from threat, that is, the security from

threatening events or surroundings.

• Belongingness, Social and love. The need for friendship affiliation interaction and

love

• Esteem. The need for self-esteem and for esteem from others

• Self- Actualization. The need for fulfill oneself by making maximum use of

abilities skills and potential.

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Alderfer’s ERG theory. (three-level hierarchy)

3 set of needs

1. Existence

2. Relatedness

3. Growth

Herberg’sTwo-Factor Theory

The two factors are called the dissatisfiers-satisfiers or the hygiene motivators or the

extrinsic-intrinsic factors.

Extrinsic -Salary, Job Security, Working conditions, Status, Company

procedures,Quality of technical supervision, Quality of interpersonal relation.

Intrinsic -Achievement, Recognition, Responsibility , Advancement, The work itself, the

possibility of growth.

Motivation and Human Needs

• Two-Factor Theory

➢ Herzberg

○ satisfier factors (job content)

 things related to the nature of the job itself

 source of job satisfaction and motivation

○ hygiene factors (job context)

 things related more to the work setting

 source of job dissatisfaction

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McClelland’s Learned Needs Theory McClelland has proposed a theory of motivation

that is closely associated with learning concepts. Many needs are acquire from the

culture : Achievement, Affiliation , Power.

A graphic Comparison of Four Content Approaches to Motivation

Conclusion of Need-Based Approaches

• Herzberg’s Two-Factor Approach - “Hygienes” satisfy lower-level needs

and “motivators” satisfy higher-level needs.

• Needs for Achievement, Power and Affiliation

Process Approaches

1. Adam’s Equity Theory - Assumes that people have a need for, and therefore

value and seek, fairness at work.

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 Adam’s Equity Theory of work Motivation.

(based on comparisons that individual make between input and output)

Op=Oc

Ip Ic

2. Locke’s Goal Theory of Motivation - Once someone decides to pursue a goal, the

person regulates his/her behavior to reach the goal.

• Vroom’s Expectancy Theory

• Expectancy

• Instrumentality

• Valence

• Vroom’s VIE Expectancy.(an expectance theory of choice)

M =V x I x E

V= Valence
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 I = Instrumentality

E = Expectancy

• Porter-Lawler’s Expectancy Theory of Motivation.

M =E x I x V

• Learning Reinforcement Approaches

➢ Learning - Relatively permanent change as a result of experience.

➢ Operant behavior

➢ Contingent reward

➢ Behavior modification

➢ Positive reinforcement

➢ Extinction

➢ Negative reinforcement

➢ Punishment

Behavior Modification

Changing or modifying behavior through the use of contingent rewards or punishment.

Based on 2 principles

1. Behavior that appears to lead to a positive consequence tends to be repeated

2. Behavior that appears to lead to a negative consequence tends not to be

repeated.

Methods for influencing behavior & motivating employee

There are 3 important methods

1. Motivation inaction

2. Job Design

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 3. Alternative Work Arrangements

Motivation in Action

1. MBO

2. Pay for performance

3. Merit raises

4. Sport rewards

5. Skill-based pay

6. Recognition awards

7. Empower employees

8. Goal setting (MBO)

9. Positive reinforcement

10. Lifelong learning

Pay for Performance

This is a one system of remuneration program which popular at this moment, it’s

depend upon the evaluation if the result is good you will receive more salary increase.

Using Merit Pay

A merit raise is a salary increase, usually permanent, that is based on the employee’s

individual performance. It is a continuing increment rather than a single payment like

bonus.Relying heavily on merit rewards can be a problem because the reinforcement

benefits of merit pay are usually only determined once per year.

Using Spot Awards

A spot award is one given to an employee as soon as the laudable performances

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observed.These rewards are consistent with principles of motivation because they are

contingent on good performance and are awarded immediately.

Using Skill-Based Pay

With Skill-based pay, employees are paid for the range, depth and types of skills and

knowledge they are capable of using there than for the job they currently hold. Skill-

based pay is consistent with motivation theory because people have self-concept in

which they seek to fulfill their potential. The system also appeals to the employee’s

sense-efficiency because the reward is a formal and concrete recognition that the

person can do the more challenging job well.

Using Recognition

Some employees highly value day-to- day recognition from their supervisors, peers and

team members because it is important for their work to be appreciated by others,

Recognition helps satisfy the need people have to achieve and be recognized for their

achievement.

Using Empowerment

Empowerment means giving employees the authority, tools and information they need

to do their jobs with greater autonomy

Using Goal-Setting Methods

People are strongly motivated to achieve goals they consciously set.

Using Positive Reinforcement

Rely on Operant conditioning principles to study positive reinforcement and change

behavior. They are variety of consequences including

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Social consequences (peer approval or praise from the boss)

Intrinsic consequences (The enjoyment the person gets from accomplishing tasks)

Tangible consequences (bonuses, merit raises.)

Summary
Managing and leading are not the same activity. A manager manages employees; this

person makes sure that tasks are completed on time and policies are followed.

Employees typically follow managers because he or she is the supervisor and in-charge

of employees. Employees see a leader as someone that motivates them and guides

them to help meet the firm’s goals. In an ideal situation, the manager also serves as the

leader. Managers who want to lead effectively need to discover what motivates their

employees and inspire them to reach the company objectives.

Bibliography

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John Schermerhorn. (2008) Management 9th edition. John Wiley and Sons

Heins Weihrich and Harold Kontz (2005) Management 11th edition, McGraw Hill

www.businessmanagement.suite101.com
www.scribd.org

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