Unit one

Leadership

Leadership is a process by which a person influences others to accomplish an objective

and directs the organization in a way that makes it more cohesive and coherent.
Leadership is a process of social influence, which maximizes the efforts of others,
towards the achievement of a goal (Kruse, 2013). Leaders carry out this process by
applying their leadership knowledge  and skills . This is called Process
Leadership (Jago, 1982). However, we know that we have traits that can influence our
actions. This is called Trait Leadership (Jago, 1982), in that it was once common to
believe that leaders were born rather than made. These two leadership types are shown in
the chart below (Northouse, 2007, p5): While leadership is learned, a leader's skills and
knowledge can be influenced by his or hers attributes or traits, such
as beliefs , values , ethics , and character . Knowledge and skills contribute directly to
the process of leadership, while the other attributes give the leader certain
characteristics that make him or her unique.

For example, a leader might have learned the skills in counseling others, but her traits
will often play a great role in determining how she counsels. A person who has
empathy will make a better counselor than a person who thinks the employees are
simply there do accomplish her biddings

1. Leader versus Manager

“Leadership and manager ship are two synonymous terms” is an incorrect statement. Leadership
doesn’t require any managerial position to act as a leader. On the other hand, a manager can be a
true manager only if he has got the traits of leader in him. By virtue of his position, manager has
to provide leadership to his group. A manager has to perform all five functions to achieve goals,
i.e., Planning, Organizing, Staffing, Directing, and Controlling. Leadership is a part of these
functions. Leadership as a general term is not related to managership. A person can be a leader
by virtue of qualities in him. For example: leader of a club, class, welfare association, social
organization, etc. Therefore, it is true to say that, “All managers are leaders, but all leaders are
not managers.”

A leader is one who influences the behavior and work of others in group efforts towards
achievement of specified goals in a given situation. On the other hand, manager can be a true
manager only if he has got traits of leader in him. Manager at all levels are expected to be the
leaders of work groups so that subordinates willingly carry instructions and accept their
guidance. A person can be a leader by virtue of all qualities in him.
Leaders and Managers can be compared on the following basis:

Basis Manager Leader

A person becomes a manager by A person becomes a leader on basis of

Origin
virtue of his position. his personal qualities.

Manager has got formal rights in an

Formal Rights Rights are not available to a leader.
organization because of his status.

The subordinates are the followers The group of employees whom the
Followers
of managers. leaders leads are his followers.

A manager performs all five Leader influences people to work

Functions
functions of management. willingly for group objectives.

A leader is required to create cordial

A manager is very essential to a
Necessity relation between person working in
concern.
and for organization.

Stability It is more stable. Leadership is temporary.

Mutual
All managers are leaders. All leaders are not managers.
Relationship

Manager is accountable for self and

Leaders have no well defined
Accountability subordinates behavior and
accountability.
performance.

A manager’s concern is A leader’s concern is group goals and

Concern
organizational goals. member’s satisfaction.

People follow manager by virtue of People follow them on voluntary

Followers
job description. basis.

Role A manager can continue in office A leader can maintain his position
continuation till he performs his duties only through day to day wishes of
 satisfactorily in congruence with
followers.
organizational goals.

A leader has command over different

Manager has command over
sanctions and related task records.
Sanctions allocation and distribution of
These sanctions are essentially of
sanctions.
informal nature.

2. Understanding the Contingency Theory of Leadership

The contingency theory of leadership supposes that a leader’s effectiveness is contingent on whether or
not their leadership style suits a particular situation. According to this theory, an individual can be an
effective leader in one circumstance and an ineffective leader in another one. To maximize your
likelihood of being a productive leader, this theory posits that you should be able to examine each
situation and decide if your leadership style is going to be effective or not. In most cases, this requires
you to be self-aware, objective and adaptable. Contingency theories put forth the idea that the
success of a leader hinges on the specific situation at hand. Certain factors come into play that
define whether a particular leader or leadership style will be effective for the given situation.
Those factors include the task, the personality of the leader and the composition of the group that
is meant to be led. Its basic assumption is that leadership – success or failure – is situational.

There are a number of different sub-theories that fall under the general contingency umbrella.
They include: Fiedler’s Contingency Theory, the Situational Leadership Theory, the Path-Goal
Theory and the Decision-Making Theory. While all similar on the surface, they each offer their
own distinct views on leadership.

 Fiedler’s Contingency Theory

This theory puts forth the idea that effective leadership hinges not only on the style used by the
leader, but also on the control held over the situation. In order to succeed, there must be strong
leader-member relations. Leaders must also present tasks clearly and with goals and procedures
outlined. They need to possess the ability to hand out punishments and rewards, as well.This
particular theory only fits situations where groups are closely supervised and not team-based. It
also uses a least preferred co-worker (LPC) scale to help determine the type of worker the leader
least likes working with. This theory emphasizes the leader’s disposition as the main trait that
defines the ability to lead. Fiedler’s Contingency Theory

 Situational Leadership

More formally called the Hersey-Blanchard Situational Leadership Theory, this model focuses
on leadership style and the maturity of those being led. The theory puts forth the idea that
leadership styles hinge on four behaviors: telling, selling, participating and delegating. The
maturity levels range from an incompetence or unwillingness to perform the task, to a
willingness and ability to perform.  The idea is that a successful leader will adapt leadership
techniques to fit the maturity level of the group in question on a situational basis. The situational
theory of leadership refers to those leaders who adopt different leadership styles according to
the situation and the development level of their team members. It is an effective way of
leadership because it adapts to the team’s needs and sets a beneficial balance for the whole
organization.

 Path-Goal Theory

This theory combines two popular theories – goal-setting and expectancy – into one. It puts forth
the idea that effective leaders help those in their direction attain their goals. Under this theory,
leaders have the responsibility of making sure their subordinates have the support and
information required to achieve the goals set forth. Essentially, this theory holds that effective
leaders create clear paths to help their subordinates achieve goals and that they work to remove
obstacles that stand in the way. The Path-Goal model is a theory based on specifying a
leader's style  or behavior that best fits the employee and work environment in order to
achieve a goal (House, Mitchell, 1974). The goal is to increase your employees'
motivation, empowerment, and satisfaction so they become productive members of the
organization.

Path-Goal is based on Vroom's (1964) expectancy theory  in which an individual will

act in a certain way based on the expectation that the act will be followed by a given
outcome and on the attractiveness of that outcome to the individual. The path-goal
theory was first introduced by Martin Evans (1970) and then further developed by
House (1971).

The path-goal theory can best be thought of as a process in which leaders select
specific behaviors that are best suited to the employees' needs and the working
environment so that they may best guide the employees through their  path in the
obtainment of their daily work activities (goals) (Northouse, 2013).

While Path-Goal Theory is not a detailed process, it generally follows these basic steps
as shown in the graphic below:

1. Determine the employee and environmental characteristics

2. Select a leadership style
3. Focus on motivational factors that will help the employee succeed

 Decision-Making Theory

Also known as the Vroom-Yetton-Jago Decision-Making Model of Leadership, it puts forth the
idea that effective leader’s size up situations, assess them and then determine how much support
the group will give toward the effort, adjusting style of leadership to fit.

While contingency models diverge on some points, they all share a common thread. The
overlying viewpoint of this theory is that effective leadership is contingent on the situation, task
and people involved. At the heart of the Vroom-Yetton-Jago Decision Model is the fact that not
all decisions are created equal. Some decisions are extremely important and will require input
from many people, while other decisions can be made quickly as they won’t have long-lasting
effects on the company as a whole. Understanding this basic concept is important, because you
 aren’t going to use the same decision-making process for all choices that you have to make. With
the assistance of this model, you can customize your approach to decision making based on the
situation at hand.
There are three factors which this model uses to analyze the decision that needs to be made.
Those factors are listed below –

 Decision Quality. Simply put, this is where you think about how important it is to come
up with the right decision. Sure, you always want to make the right choice, but some
circumstances are more important than others in the context of business as a whole. Committing
a large number of resources to each and every decision you make would be inefficient, as many
decisions just are not important enough to warrant that kind of investment. Pick and choose your
spots and only invest a large amount of time and energy into the decisions that are truly going to
shape your organizational future.
 Subordinate commitment. Some decisions that you make are going to have a strong
impact on your team, while others will not affect them at all. When thinking about each decision,
consider how much of an affect it is going to have on your team and others within and around the
organization. If you it essential that you have ‘buy in’ from the people on your team, you will be
more inclined to include them in the decision-making process. If not, you may be able to make
the decision on your own with very little input from others below you.
 Time constraints. Obviously, the timeline that you have in front of you for a given
decision is going to impact the process that you can use to make your choice. If you are in no
particular rush to make the decision, there will be plenty of time to include others, conduct
research, and more. On the other hand, if the matter if time sensitive, you might not really have
the option of going to others for help. Develop a clear timeline right up front for your decision
and then chart out whether or not you are going to have time to get input from various areas.
Once you have held up the decision you need to make to the light that is offered by each of these
three points, you should have a much clearer picture of the path needed to make a quality choice.
Moving on, you will then decide which leadership style will be best for making this decision.
You can pick from three options – autocratic, consultative, and collaborative. You can read more
on the specifics of this model for more detail on these three, but their titles largely speak for
themselves. By thinking about the factors that make up each decision and the type of leadership
style best-suited for the decision, this model can lead you to a wise choice in the end.

3. Contemporary views of leadership

  Charismatic Leadership:-

Charismatic leadership is basically the method of encouraging particular behaviors in others by

way of eloquent communication, persuasion and force of personality.  Charismatic leaders
motivate followers to get things done or improve the way certain things are done.  This is
accomplished by conjuring up eagerness in others to achieve a stated goal or vision.  In essence,
the charismatic leadership style has its basis in a form of heroism.  This leadership style is almost
of divine origin.

 Transformational Leadership :-
Transformational leadership is a leadership style in which leaders encourage, inspire and
motivate employees to innovate and create change that will help grow and shape the future
success of the company. This is accomplished by setting an example at the executive level
through a strong sense of corporate culture, employee ownership and independence in the
workplace.
Transformational leaders inspire and motivate their workforce without micromanaging — they
trust trained employees to take authority over decisions in their assigned jobs. It’s a management
style that’s designed to give employees more room to be creative, look to the future and find new
solutions to old problems. Employees on the leadership track will also be prepared to become
transformational leaders themselves through mentorship and training. he concept of
transformational leadership started with James V. Downton in 1973 and was expanded by James
Burns in 1978. In 1985, researcher Bernard M. Bass further expanded the concept to include
ways for measuring the success of transformational leadership. This model encourages leaders to
demonstrate authentic, strong leadership with the idea that employees will be inspired to follow
suit.
While Bass’ model dates to the ’70s, it’s still an effective leadership style practiced today — this
style of authentic leadership never changes, just the environments it’s used in. It’s applicable
across every industry, but it’s especially vital to the fast-paced tech industry where innovation
and agility can make or break a company.

Transactional Leadership Transformational Leadership

Leadership is responsive Leadership is proactive

Works within the organizational culture. Works to change the organizational culture by
implementing new ideas.

Employees achieve objectives through Employees achieve objectives through higher ideals
rewards and punishments set by the leader. and moral values.

Motivates followers by appealing to their Motivates followers by encouraging them to put

self-interest. group interests first.

Management-by-exception Individualized consideration

maintain the status quo; stress correct Each behavior is directed to each individual to
actions to improve performance. express consideration and support.

Intellectual stimulation or motivation is Intellectual stimulation

zero. Promote creative and innovative ideas to solve
problems.

 Team Leadership:-

Team leadership models can help you think through how you may need to change your
leadership approach for  different stages of a team’s development. Teams are one of the most
important situations in which leaders need to adapt different styles. There are numerous
leadership theories each focused on a different situation or contingency, they help leaders think
through how decisions are made or how to adapt a style dependent on an individual’s confidence
and competence. Few consider style applied to teams. Our approach brings together a team
stages view with possible leadership styles for each stage. There are a wide range of team stage
models  and they all broadly follow a team from inception through to performing well.

Here we will use the following stages:

 Creating a new team

 Developing a team
 Performing and achieving results with a team
 Sustaining team performance
Different stages of team development are likely to require different styles of leadership. In the
following section we will consider a team leadership model with four styles for each of the
stages of team development:

 Steering
 Supporting
 Stimulating
 Synergising
Alongside this model for teams we have also developed a really helpful model for determining
where your focus as a leader needs to be. We explain this in our article: leading teams: where’s
your focus?

• Leadership is based on the idea that “good leaders are no longer bosses”.
• According to the concept of team leadership, the major roles of leader are:
Identify unique talents of people and play chess, not checkers
Trust, empower and delegate

• Provide support as needed, focus on complementary skills and synergize

• Manage conflicts and handle disciplinary problems

•Liaise with external constituencies

 Level 5 leadership:-

Level 5 leaders display a powerful mixture of personal humility and indomitable will. They're
incredibly ambitious, but their ambition is first and foremost for the cause, for the organization
and its purpose, not themselves. While Level 5 leaders can come in many personality packages,
they are often self-effacing, quiet, reserved, and even shy. Every good-to-great transition in our
research began with a Level 5 leader who motivated the enterprise more with inspired standards
than inspiring personality.
While reading Jim Collins’ Level 5 Leadership, I began to think about leaders in my life that
would fit these traits he is describing. Basically adding a face to the description to help with
understanding, and just like it is suggested, it was a lot easier to add a “face” to level 1 or 2 than
it was to level 4 or 5. There are a lot more leaders that only function at lower levels. Jim Collins
explained the different Levels as:
1. Highly Capable Individual 
2. Contributing Team Member
3. Competent Manager
4. Effective Leader
5. Executive
To be able to reach a Level 5 Leader, you must be willing to lead with a good degree of humility
that understands when your wrong. Taking the blame for poor ideas or bad decisions, and giving
credit to others for great ideas is also a strong trait of a Level 5 Leader. A strong Level 5 Leader
will also have a drive for personal and group excellence that will help move ideas and people
along. Jim Collins’ book Good to Great uncovers through research what the differences between
a Level 4 leader and a Level 5 leader which can take your company from Good to Great! 

• The essence of level 5 leadership

• Deep personal humility + intense professional will

 • Highly ambitious for the success of the company — Attend to people first, strategy
second

• Get the right people on the bus and the wrong people off - then figure out where to drive
it. Five levels of 'Level 5 Leadership'

• Level 5: Executive - Builds enduring greatness through a paradoxical combination of

personal humility (humble or lack of false pride or ‘down-to-earth’) plus professional
will.

• Level 4: Effective Leader - Catalyzes commitment to and vigorous pursuit of a clear and
compelling vision; stimulates the group to high performance standards.

• Level 3: Competent Manager - Organizes people and other resources towards the
Achievement of predetermined goals.

• Level 2: Contributing Team Member - Works effectively with others and contributes to
the
achievement of group goals.

• Level 1: Highly Capable Individual - Makes productive contributions through

knowledge, skills and good work habits.

Traits for Good Leadership

• 1. Visionary

• 2. Charismatic

• 3. Assertive but flexible as well

• 4. Dedicated

• 5. Authentic (self awareness, internalized moral perspective, balanced

processing of

• information, and relational transparency)

• 6. Emotionally Intelligent (self awareness, self regulation, empathy, motivation for

causes,

• social skills)

• 7. Technical and professional expertise etc.

4. Motivation
Motivation is an important factor which encourages persons to give their best performance and
help in reaching enterprise goals. A strong positive motivation will enable the increased output
of employees but a negative motivation will reduce their performance. A key element in
personnel management is motivation. According to Liker, “It is the core of management which
shows that every human being gives him a sense of worth in face-to face groups which are most
important to him….A supervisor should strive to treat individuals with dignity and a recognition
of their personal worth.”

Motivation is the processes that account for an individual’s intensity, direction, and persistence
of effort toward attaining a goal. The main features of motivation are a goal-oriented continuous
process and a psychological phenomenon that converts abilities into performance. It is the art of
inducing employees to work diligently and sincerely to the success of the enterprise. It is the
intensification of the desire of the

4.1 Maslow's hierarchy of needs theory:

Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of
Human Motivation" and his subsequent book Motivation and Personality. This hierarchy
suggests that people are motivated to fulfill basic needs before moving on to other, more
advanced needs. Maslow was much more interested in learning about what makes people happy
and the things that they do to achieve that aim. As a humanist, Maslow believed that people have
an inborn desire to be self-actualized, that is, to be all they can be. In order to achieve these
ultimate goals, however, a number of more basic needs must be met such as the need for food,
safety, love, and self-esteem.. In order to better understand what motivates human
beings, Maslow proposed that human needs can be organized into a hierarchy. This hierarchy
ranges from more concrete needs such as food and water to abstract concepts such as self-
fulfillment. According to Maslow, when a lower need is met, the next need on the hierarchy
becomes our focus of attention

There are five different levels of Maslow’s hierarchy of needs. Let's take a closer look at
Maslow’s needs starting at the lowest level, known as physiological needs. 
I. Physiological Needs

The basic physiological needs are probably fairly apparent—these include the things that are
vital to our survival. Some examples of physiological needs include:

 Food
 Water
 Breathing
 Homeostasis

In addition to the basic requirements of nutrition, air and temperature regulation, the
physiological needs also include such things as shelter and clothing. Maslow also included
sexual reproduction in this level of the hierarchy of needs since it is essential to the survival and
propagation of the species.

II. Security and Safety Needs

As we move up to the second level of Maslow’s hierarchy of needs, the requirements start to
become a bit more complex. At this level, the needs for security and safety become primary.

People want control and order in their lives. So, this need for safety and security contributes
largely to behaviors at this level. Some of the basic security and safety needs include:

 Financial security
 Health and wellness
 Safety against accidents and injury
 Finding a job, obtaining health insurance and health care, contributing money to a savings
account, and moving into a safer neighborhood are all examples of actions motivated by the
security and safety needs.

Together, the safety and physiological levels of the hierarchy make up what is often referred to
as the basic needs.

III. Social Needs

The social needs in Maslow’s hierarchy include such things as love, acceptance, and belonging.
At this level, the need for emotional relationships drives human behavior. Some of the things that
satisfy this need include:

 Friendships
 Romantic attachments
 Family
 Social groups
 Community groups
 Churches and religious organizations

In order to avoid problems such as loneliness, depression, and anxiety, it is important for people
to feel loved and accepted by other people. Personal relationships with friends, family, and
lovers play an important role, as doe’s involvement in other groups that might include religious
groups, sports teams, book clubs, and other group activities.
IV. Esteem Needs

At the fourth level in Maslow’s hierarchy is the need for appreciation and respect. When the
needs at the bottom three levels have been satisfied, the esteem needs begin to play a more
prominent role in motivating behavior.

At this point, it becomes increasingly important to gain the respect and appreciation of others.
People have a need to accomplish things and then have their efforts recognized. In addition to the
need for feelings of accomplishment and prestige, esteem needs include such things as self-
esteem and personal worth.

People need to sense that they are valued and by others and feel that they are making a
contribution to the world.

Participation in professional activities, academic accomplishments, athletic or team participation,

and personal hobbies can all play a role in fulfilling the esteem needs. People who are able to
satisfy the esteem needs by achieving good self-esteem and the recognition of others tend to feel
confident in their abilities.

Those who lack self-esteem and the respect of others can develop feelings of inferiority.
Together, the esteem and social levels make up what is known as the psychological needs of the
hierarchy.
V. Self-Actualization Needs

At the very peak of Maslow’s hierarchy are the self-actualization needs. "What a man can be, he
must be," Maslow explained, referring to the need people have to achieve their full potential as
human beings.

According to Maslow’s definition of self-actualization, "It may be loosely described as the full
use and exploitation of talents, capabilities, potentialities, etc. Such people seem to be fulfilling
themselves and to be doing the best that they are capable of doing. They are people who have
developed or are developing to the full stature of which they capable."

Self-actualizing people are self-aware, concerned with personal growth, less concerned with the
opinions of others, and interested in fulfilling their potential.

4.2 Herzberg's two-factor theory

This theory, also called the Motivation-Hygiene Theory or the dual-factor theory, was penned
by Frederick Herzberg in 1959. This American psychologist, who was very interested in
people’s motivation and job satisfaction, came up with the theory. He conducted his research by
asking a group of people about their good and bad experiences at work. He was surprised that the
group answered questions about their good experiences very differently from the ones about their
bad experiences.

Based on this, he developed the theory that people’s job satisfaction depends on two kinds of
factors. Factors for satisfaction (motivators / satisfiers) and factors for dissatisfaction (hygiene
factors / dissatisfies).

Performance, recognition, job status, responsibility and opportunities for growth all fall
under motivators/ satisfiers.

Hygiene factors/dissatisfies are about salary, secondary working conditions, the relationship

with colleagues, physical work place and the relationship between supervisor and employee.

In his theory, Herzberg claims these factors function on the same plane. In other words,
satisfaction and dissatisfaction aren’t polar opposites. Taking away an employee’s dissatisfaction
– for example by offering a higher salary – doesn’t necessarily mean the employee will then be
satisfied. The employee is just no longer dissatisfied.

The two factors identified by Herzberg are motivators and hygiene factors

Hygiene factors, or extrinsic motivators, tend to represent more tangible, basic needs—i.e., the
kinds of needs included in the existence category of needs in the ERG theory or in the lower
levels of Maslow’s hierarchy of needs. Extrinsic motivators include status, job security, salary,
and fringe benefits. It’s important for managers to realize that not providing the appropriate and
expected extrinsic motivators will sow dissatisfaction and decrease motivation among
employees.
Motivation factors, or intrinsic motivators, tend to represent less tangible, more emotional
needs—i.e., the kinds of needs identified in the “relatedness” and “growth” categories of needs
in the ERG theory and in the higher levels of Maslow’s hierarchy of needs. Intrinsic motivators
include challenging work, recognition, relationships, and growth potential. Managers need
to recognize that while these needs may fall outside the more traditional scope of what
a workplace ought to provide, they can be critical to strong individual and team performance.

The factor that differentiates two-factor theory from the others we’ve discussed is the role of
employee expectations. According to Herzberg, intrinsic motivators and extrinsic motivators
have an inverse relationship. That is, intrinsic motivators tend to increase motivation when they
are present, while extrinsic motivators tend to reduce motivation when they are absent. This is
due to employees’ expectations. Extrinsic motivators (e.g., salary, benefits) are expected, so they
won’t increase motivation when they are in place, but they will cause dissatisfaction when they
are missing. Intrinsic motivators (e.g., challenging work, growth potential), on the other hand,
can be a source of additional motivation when they are available.
Unit Two

Leadership Behavior

Leadership Behaviors can simply be defined as the way they behave with their people.
Leadership behavior is the traits and actions that make an individual effective as a leader. This
behavior is the process by which a person can guide, direct and influence the work of others to
meet specific goals. These actions and strategies can be learned to increase the effectiveness of
those around them. Individuals use these behaviors to motivate people into action when they
have a vision for an organization, a product or a group of people. Good leadership behaviors are
crucial in order to become someone who inspires and leads people to maximize efficiency and
to achieve the goals of the organization. Behavior change gives every leader a path forward to
increasing effectiveness. Behaviors can be learned whereas characteristics, such as charisma,
seem inborn and more difficult to practice Leadership behaviors are essential in order to:

 Increase the productivity of a team: Consistent leadership can motivate a team to

greater performance.
 Retain people: Employees are less likely to leave if they receive great leadership and
mentorship in their current roles.
 Nurture future leaders: Leadership behaviors are integral to develop and nurture future
leaders within an organization.

Leadership Behaviors as mentioned below.

1. Be honest
Honesty helps to create a work environment that feels fair and open. Employees will be more
likely to trust your decisions and trust you with their problems if they feel that you are honest
with them. Doing what you have said you will do can show your team that you are trustworthy.
2. Be confident in your decisions
Making decisions swiftly and confidently is one of your primary duties as a leader. Your team
should have faith that you are capable of making a decision. When you confidently commit to a
decision, your employees will have confidence in your abilities as a leader.
3. Be approachable
Work to keep lines of communication open so that your team feels like they can talk to you.
Display active listening skills to encourage communication, such as asking open-ended questions
and being attentive while the employee speaks. Keep your employees informed by
communicating with them regularly about decisions and what is happening within the team and
organization.
4. Provide objective feedback
Your team should know what you expect of them and how they can improve. This should be
done positively with a focus on educating employees rather than punishing them. Corrections
should be done privately so as not to embarrass team members. Create a positive, trusting
relationship by identifying what the employee is doing correctly and suggesting ways they could
do better.
5. Lead by example
Hold yourself to the same standards as employees. If your team is required to stay late, stay late
with them. If your team must reach a particular goal, it should be something you can also attain.
While delegating is an essential skill that leaders must possess, your team will appreciate it when
you can work alongside them toward a common objective.
Related: How to Demonstrate Leadership Skills at Work
6. Create a reward program for staff members
Publicly recognize the achievements and milestones of each team member. When employees feel
as though their accomplishments are appreciated, they are more likely to work towards new
goals and achievements. Having a reward program in place helps motivate employees towards
reaching individual and team objectives. Even a simple thank you to staff members for their
efforts is a way to show appreciation and encourage employees to continue to do their best.
7. Change how you approach your work
Becoming an effective leader is a skill that needs to be practiced daily. One way to start the
process of becoming a leader and being recognized as someone with strong leadership behavior
is to change the way you think. People who wish to become leaders should redefine their job
duties. Consider what you could do in addition to your typical tasks to help your team,
department or organization. The goal is to be proactive with your work and find a way to
contribute meaningfully.
Broaden your connections by networking with employees outside of your group, peers outside of
your organization or people in different industries. Give yourself a bigger perspective to
stimulate creative and strategic solutions. This can strengthen your problem-solving skills and
the ability to come up with innovative new methods.
To begin to implement these new behaviors, start with just two actions you can do that will
display leadership. For example, you could notice and recognize the achievements of your peers
or any staff members that you supervise and provide positive and objective feedback on how to
improve. Actively focus on two leadership behaviors until they come naturally to you. Then
identify two more leadership behaviors and incorporate them into your daily routine until they
become a natural part of your leadership style.
8. Address potential issues before they become problems
By closely monitoring your staff, you will be able to notice areas that have the potential to
develop into a problem. If there is a lag in productivity, for example, you will recognize the issue
and be able to take corrective action before it becomes a larger problem.
9. Pay attention to the needs of individual employees and try to meet them
In addition to monitoring your team members for potential issues, you can also note what their
individual needs are. Some people may work better with minimal supervision, while others may
find they work best when presented with a challenging variety of tasks. When you know what
each individual needs, you can try to meet those needs and gain the respect of your team. This
can improve motivation and job satisfaction.
10. Encourage creativity by keeping lines of communication open
Allow and encourage people to approach you with their ideas. When your team knows they are
able to talk to you about potential changes and ways to improve the work environment, you are
more likely to hear creative solutions from them. For example, someone may have a suggestion
on how to make a task more efficient.

Leadership traits:-
Leadership traits refer to personal qualities that define effective leaders. Leadership refers to the
ability of an individual or an organization to guide individuals, teams, or organizations toward
the fulfillment of goals and objectives. It plays an important function in management, as it helps
maximize efficiency and achieve strategic and organizational goals. Leaders help motivate
others, provide guidance, build morale, improve the work environment, and initiate action. A
common misconception is that individuals are just naturally gifted with leadership skills. The
truth is that leadership traits, like other skills, can be acquired with time and practice. Below are
seven traits of an effective leader:

1.   Effective Communicators

Leaders are excellent communicators, able to clearly and concisely explain problems and
solutions. Leaders know when to talk and when to listen. In addition, leaders are able to
communicate on different levels: one-on-one, via phone, email, etc.
 
2.  Accountable and Responsible
Leaders hold themselves accountable and take responsibility for any mistakes. Leaders support
and encourage individuality while abiding by organizational structure, rules, and policies that
need to be followed.
 
3.  Long-term Thinkers
Leaders are visionaries. This is evidenced by the leadership trait of being able to plan for the
future through concrete and quantifiable goals. They understand the need for continuous change
and are open to trying new approaches to solve problems or improve processes.
 
4.  Self-motivated
Leaders are self-motivated and are able to keep going and attain goals despite setbacks. In
addition, good leaders try their best to exceed, not just meet, expectations.
 
5.  Confident
Virtually all good leaders share the leadership trait of confidence. They are able to make tough
decisions and lead with authority. By being confident, leaders are able to reassure and inspire
others, establish open communications, and encourage teamwork.
 
6.  People-oriented
Leaders are typically people-oriented and team players. They’re able to foster a team culture,
involve others in decision-making, and show concern for each team member. By being people-
oriented, leaders are able to energize and motivate others. By making each individual feel
important and vital to the team’s success, they secure the best efforts from each member of the
team.
 
7.  Emotionally Stable
Leaders exercise good control and regulation over their own behavior and are able to tolerate
frustration and stress. Leaders are able to cope with changes in an environment without having
an intense emotional reaction.

Situational Leadership:-
Situational leadership is a leadership style that has been developed and studied by Kenneth
Blanchard and Paul Hersey. Situational leadership refers to when the leader or manager of an
organization must adjust his style to fit the development level of the followers he is trying to
influence. With situational leadership, it is up to the leader to change his style, not the follower
to adapt to the leader’s style. In situational leadership, the style may change continually to
meet the needs of others in the organization based on the situation.

1. Telling And Directing

In telling/directing, the leader of the organization is the one making the decisions and
informing others in the organization of the decision. This style of leadership may also be
referred to as micro-management as the leader is very involved and closely supervises the
people who are working. With this style of leadership, it is a very top-down approach and the
employees simply do exactly what they are told.

2. Selling And Coaching

With the selling and coaching style of leadership, the leader is still very involved in the day-to-
day activities. The decisions still ultimately lie with the leader, however, input is requested
from the employees before the decision is implemented.

With this style of situational leadership, employees are still supervised but it is in more of a
coaching manner rather than a management manner. This style typically works well with those
who are inexperienced and still learning. It involves direct praise to increase their confidence
and self-esteem.
3. Participating And Supporting

The participating and supporting style of situational leadership passes more responsibility to
the employers or followers. While the leader still provides some direction, the decisions
ultimately lie with the follower. The leader is there to provide feedback and to increase their
confidence and motivation with praise and feedback for the tasks completed. Those who work
well under this style of situational leadership have the necessary skills but lack the confidence
or motivation to achieve them.

4. Delegating to Employees

Delegating is the situational leadership style where the leader is involved the least amount with
the employees. The employees are responsible for choosing the tasks and the directions they
will take. Although the leader may still be involved for direction or feedback purposes, it is on
a much lower level than with other situational leadership styles. With this style of leadership,
the employees know their role and perform it with little supervision required.

5. Considering Development Level

The development level of the follower determines the situational leadership style of the leader.
Blanchard and Hersey have developed a matrix so that leaders can easily determine the
leadership style needed by the employee based on their development level. For those with high
needs and little experience, the directing style will be necessary whereas with those with low
needs and high competence, the delegating style can be used.

Transactional Leadership:-
Transactional leadership focuses on results, conforms to the existing structure of an organization
and measures success according to that organization's system of rewards and penalties.
Transactional leaders have formal authority and positions of responsibility in an organization.
This type of leader is responsible for maintaining routine by managing individual performance
and facilitating group performance.
This type of leader sets the criteria for their workers according to previously defined
requirements. Performance reviews are the most common way to judge employee performance.
Transactional, or managerial, leaders work best with employees who know their jobs and are
motivated by the reward-penalty system. The status quo of an organization is maintained through
transactional leadership. Transactional leadership theory is based on the idea that managers give
employees something they want in exchange for getting something they want. It posits that
workers are not self-motivated and require structure, instruction and monitoring in order to
complete tasks correctly and on time.
The transactional leadership style was widely used after World War II in the United States. This
was a time when the government concentrated on rebuilding and required a high level of
structure to maintain national stability.

Transactional leadership style

Here are some of the characteristics of transactional leaders:
  Focused on short-term goals
 Favor structured policies and procedures
 Thrive on following rules and doing things correctly
 Revel in efficiency
 Very left-brained
 Tend to be inflexible
 Opposed to change

There is definitely a place for transactional leadership in the world today. One of its best uses is
in multinational corporations where not all of the workers speak the same language. Once the
structure and the requirements are learned, it is easy for workers to complete tasks successfully.
This works because transactional leadership is simple to learn and does not require extensive
training. The transactional approach is easy to understand and apply across much of an
organization.
The military, policing organizations, and first responders use this style of leadership so that all
areas of the organization are consistent. It is also easier to apply in a crisis situation, where
everyone must know exactly what is required of them and how a task is to be done under
pressure.
To many people, money and perks are a powerful motivator. Many people need a job to pay the
bills. They have other obligations and distractions and would just as soon know exactly how to
do their job in order to keep it and reap the rewards.

Functional leadership:-

Functional leadership theory (Hackman & Walton, 1986; McGrath, 1962) is a theory for
addressing specific leader behaviors expected to contribute to organizational or unit
effectiveness. This theory argues that the leader's main job is to see that whatever is necessary to
group needs is taken care of; thus, a leader can be said to have done their job well when they
have contributed to group effectiveness and cohesion.
Functional theories of leadership are developed by studying successful leaders and identifying
the actions and behaviours they show. Large studies with a large amount of data make it possible
to correlate what leaders actually do, i.e. their actions or functions with their successful results.
In the functional leadership model, leadership does not rest with one person but rests on a set
of behaviours by the group that gets things done. Any member of the group can perform these
behaviours, so any member can participate in leadership. The Functional theory of leadership,
places greater emphasis on how an organisation or task is being led rather than who has been
formally assigned a leadership role.
One of the best known and most influential of functional theories of leadership, used in
many leadership development programmes, is John Adair's "Action-Centred Leadership".
John Adair developed a model of Action-Centred Leadership that has connecting circles that
overlap because:

 the task can only be performed by the team and not by one person

 the team can only achieve excellent task performance if all the individuals are fully
developed
 the individuals need the task to be challenged and motivated
Adair's model challenged trait theory by focusing on what leaders do. He showed that leadership
could be taught and did not depend on the traits a person had.
1The eight functions of leadership

2Criticism of the model

3Implications for the nature versus nurture debate

4References

The eight functions of leadership

Adair noted the following 8 key functions for which team leaders are responsible. (Examples are
given in brackets)

1. Defining the task, (by setting clear objectives through SMART goals)

2. Planning, (by looking at alternative ways to achieve the task and having contingency
plans in case of problems)
3. Briefing the team, (by creating the right team climate, fostering synergy, and making the
most of each individual through knowing them well)
4. Controlling what happens, (by being efficient in terms of getting maximum results from
minimum resources)
5. Evaluating results, (by assessing consequences and identifying how to improve
performance)
6. Motivating individuals, (by using both external motivators such as rewards and
incentives as well as eliciting internal motivators on the part of each team player)
7. Organising people, (by organising self and others through good time management,
personal development, and delegation)
8. Setting an example, (by the recognition that people observe their leaders and copy what
they do).

Relationship leadership:- The relationship-oriented leader exhibits support for and acceptance
of their employees as individuals, rather than as production factors. These leaders focus on the
professional and personal welfare of subordinates, rather than task structures and deadlines.
The relationship-oriented leader provides support to all employees, which is not based on job
performance or compliance with standards. For example, the leader provides positive feedback
as a means to build the confidence of employees. In addition, these leaders take steps to
improve employee satisfaction and capabilities by supporting the employee's personal goals.
The leader also works to establish positive relationships with and between group members,
which supports teamwork and collaboration. A relationship-oriented leader positively affects
business relationships and creates a collegial work environment, which contributes to the
accomplishment of business objectives. The leader also works to minimize interpersonal
conflicts and job dissatisfaction that can negatively affect productivity and quality. By offering
a high level of employee support, the leader attracts productive team members. However, team
development and interpersonal relationships may become the leader's priorities at the cost of
task accomplishment, leading to missed deadline

Steward leadership:-
Steward leadership is contagious. When employees see their managers behaving like stewards,
they often adopt the same attitude. Stewardship encourages employees at all levels to adopt more
pride in their work and take on tasks that are beyond their specified job duties. This mindset
often leads to more innovation because steward leaders are more likely to come up with
strategies that are more difficult to implement—like improving systems across departments or
changing infrastructure. Steward leadership is a form of leadership that focuses on others, the
community and society at large, rather than the self. Many senior leaders and executives across
the globe appear to ‘naturally’ move into a stewardship mindset at a ripe age or when their
careers have matured, whereas executives of around 30 years old, on average, are typically
focused on their personal self-interests. The authors of Steward Leadership: A Maturational
Perspective, wondered how to develop stewards at younger ages and set about creating a
framework for stewardship and ego maturity and its requisite behaviors. Their research tested
nine constructs: (1) personal vision, (2) personal mastery, (3) vulnerability and maturity, (4) risk-
taking and experimentation, (5) mentoring, (6) raising awareness, (7) shared vision, (8) valuing
diversity, and (9) delivering results. The outcome of the study, which is explored in this book,
provides a base-line of characteristics and behaviors (which were empirically tested against
various demographic variables). The results of their research provide the theoretical-, as well as
consulting tools with which organizations can develop stewards and mature leaders, whether
through training programmers, mentoring programmers, coaching initiatives and/or personal
development practices. The authors believe that stewardship is a more viable and indeed better
alternative to current leadership concepts. This book provides a roadmap by which contemporary
and upcoming leaders can be guided into developing their leadership abilities – and become the
stewards of the future.

Here are some of the characteristics of steward leaders:

 Steward leaders adopt a “we” perspective instead of an “I” perspective.

 Steward leaders think about the long-term picture and make sure they are clear on what’s
important to the company’s long-term success.
 Steward leaders understand that the company’s core values (e.g. financial sustainability,
product quality, ethical behavior) can be in conflict with personal values (e.g. money,
recognition, prestige).
 Steward leaders align their work – and their decisions – with the organization’s core
values.
 Steward leaders consider the short term, but steadily work toward building a stronger
team and aiming for better results in the longer term.

Servant leadership:-
Servant leadership is a leadership philosophy in which the main goal of the leader is to serve.
This is different from traditional leadership where the leader's main focus is the thriving of their
company or organizations. A Servant Leader shares power, puts the needs of the employees first
and helps people develop and perform as highly as possible. [1] Servant leadership inverts the
norm, which puts the customer service associates as a main priority. Instead of the people
working to serve the leader, the leader exists to serve the people. [2] As stated by its
founder, Robert K. Greenleaf, a Servant Leader should be focused on, "Do those served grow as
persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more
likely themselves to become servants?"[3] When leaders shift their mindset and serve first, they
benefit as well as their employees in that their employees acquire personal growth, while the
organization grows as well due to the employees growing commitment and engagement. Since
this leadership style came about, a number of different organizations have adopted this style as
their way of leadership. According to a 2002 study done by Sen Sendjaya and James C Sarros,
servant leadership is being practiced in some of the top-ranking companies, and these companies
are highly ranked because of their leadership style and following

Transformation and charismatic leadership:-

Transformational leadership is a leadership style in which leaders encourage, inspire and
motivate employees to innovate and create change that will help grow and shape the future
success of the company. This is accomplished by setting an example at the executive level
through a strong sense of corporate culture, employee ownership and independence in the
workplace.
Transformational leaders inspire and motivate their workforce without micromanaging — they
trust trained employees to take authority over decisions in their assigned jobs. It’s a management
style that’s designed to give employees more room to be creative, look to the future and find new
solutions to old problems. Employees on the leadership track will also be prepared to become
transformational leaders themselves through mentorship and training. he concept of
transformational leadership started with James V. Downton in 1973 and was expanded by James
Burns in 1978. In 1985, researcher Bernard M. Bass further expanded the concept to include
ways for measuring the success of transformational leadership. This model encourages leaders to
demonstrate authentic, strong leadership with the idea that employees will be inspired to follow
suit.
While Bass’ model dates to the ’70s, it’s still an effective leadership style practiced today — this
style of authentic leadership never changes, just the environments it’s used in. It’s applicable
across every industry, but it’s especially vital to the fast-paced tech industry where innovation
and agility can make or break a company.

charismatic leadership:-
Charismatic leadership is basically the method of encouraging particular behaviors in others by
way of eloquent communication, persuasion and force of personality.  Charismatic leaders
motivate followers to get things done or improve the way certain things are done.  This is
accomplished by conjuring up eagerness in others to achieve a stated goal or vision.  In essence,
the charismatic leadership style has its basis in a form of heroism.  This leadership style is almost
of divine origin. charismatic leaders are communicators who are extremely skilled.  These
individuals are very eloquent verbally and they have the ability to communicate with the
people they lead on a profound, emotional level.  One of the advantages of charismatic
leadership is the ability of these individuals to articulate a captivating or compelling vision. 
They have the capacity to evoke strong emotions in their followers as well.
In addition, charismatic leaders have the distinct ability to dissect and decipher any inefficiency
within an organization.  These visionary traits attributed to this leadership style often result from
critical thinking, the compilation of facts and finding ways to solve a variety of problems.

value-based leadership:-
Values-based leadership is the idea that leaders should draw on their own and followers' values
for direction and motivation. Values-based leadership philosophy asserts that people are mostly
motivated by values and live according to these beliefs. 

In other words, values are our most natural motivators. It is natural for leaders to refer to their
own values in creating a vision or making decisions and equally it makes sense for leaders to
connect with their followers' values which make them more likely to act. 

Richard Barrett, author of Building a Values-Driven Organisation, defines values-based

leadership as "...a way of making authentic decisions that builds the trust and commitment of
employees and customers."

As a philosophy, values-based leadership assumes that an organisation based around shared

values is likely to be more flexible and productive. Leaders who apply this philosophy are likely
to experience certain inner benefits.

• Leaders will make better choices feeling more comfortable to act upon them 

• Leaders are likely to build better, more trusting, less stressful relationships with followers 

• Leaders are more likely to feel aligned with their 'authentic self'

A person's values are at the core of their sense of identity. So by definition, authentic leaders will
always act from their highest values.

 Assessing leadership potential:-

It’s not hard to find an employee who can eventually advance into a management role. You can
train virtually anyone who’s intelligent enough to tackle budgets, hire when open positions
become available, and land new clients. However, the difference between a manager and
a leader is a drastic one — and it’s essential to recognize this distinction.

Assessing for leadership potential as you hire is hugely important. You don’t just want someone
who can complete spreadsheets and fill out paperwork; you need someone who can execute your
business’s overarching vision and bring the brand firmly into the future.

As you’re hiring, here are some components to focus on to be sure you’re properly assessing a
candidate’s’ leadership potential.

How do they go about earning the respect of their team?

A manager expects their team to respect them right off the bat, simply because of the title they
have had bestowed upon them. A leader understands that a title doesn’t guarantee respect, but
that they must earn this through their actions.

During the interview, considering asking the candidate how they plan to earn the respect of the
team. Do they intend on standing up at the front of the room and spouting orders or will they
create an open dialogue where everyone can contribute ideas?
Their energy levels

An effective leader is an energetic person, and this enthusiasm is contagious. If they come in
each day revived and ready to work, this positivity spreads to the rest of the office. However, if
this person shows up with stress levels raging, ready to lash out at the first person they see,
they’ll contribute to create a hostile work environment.

It’s too easy for a job seeker to tell you that they’re always positive and excited to show up to the
office. Instead of taking this response at face value, ask them a question that lets them prove this
to you. Inquire about the most exciting thing they’ve done over the past year. This could include
a trip they’ve taken, a new hobby or skill they’ve learned, or a pet project they’ve finally devoted
their attention toward. Hearing them talk about this will give you good insight about what their
passion and energy levels are really like.

What do they do when they don’t have the answers?

Great leaders aren’t afraid to ask for help. They have no shame in admitting when they don’t
know something. Rather than blindly trying to make decisions when they lack information, they
want to go to the proper sources so they can gather all of the data they need to make an informed
choice. To find out if this individual has this ability, ask the following question: “How would
you proceed if you find yourself in a situation where you simply don’t know what to do?”

If they tell you they’d make it up or just pretend and hope for the best, you know they might not
be the ideal candidate for a leadership role within your business. However, if they explain that
they would admit their area of weakness and consult with those who have the necessary
expertise, they have some of the traits of a strong leader.

The right leader believes in the importance of continuing to learn and develop, no matter how
established they are in their career. Therefore, hearing them speak about continuing education,
attending conferences, and obtaining further certifications is important.

The ability to adapt to a changing environment

No matter what industry you’re in, change is inevitable. If you’re running your business today
like you did 10 or 20 years ago, you’ll eventually find that the company starts to plateau. When
you’re hiring for management roles, you want to ensure that the people you’re putting in these
positions are willing to pivot when necessary.

Because of the way change permeates through all industries, it’s essential to touch on how this
person tackles an evolving business. How do they continue to grow as a professional? What do
they do to ensure that they’re staying on top of new trends, technology, and players in the
industry so they’re never left behind?
The factors that drive them

True leaders don’t just accept the role for the perks and the job title; they’re mission-driven and
see a greater purpose beyond just a salary boost, extra vacation days, and a company car. Before
you put someone in a management role, you want to find out what drives them. This will become
very important, especially during particularly stressful times when they may need to come in on
the weekends or work long hours.

Ask the candidate what’s appealing to them about this position. If they’re rattling off reasons like
they want to make a difference, they love inspiring others, they’ve had a lot of great mentors in
their life and they’d like to return the favor, and other valid responses, you probably have a
strong leader on your hands. If the response is more wishy-washy and points to self-centered
reasoning, you may want to question whether this individual is an ideal fit for the position.

Their relationship with their direct reports

Many people understand that, in order to lead effectively, your staff has to support your ideas
and vision. However, some people — particularly those newer to a leadership role get caught up
in the balance between earning their team’s respect and trying to befriend their employees. Yes,
your staff needs to back you, but this doesn’t mean you need to be slamming two-for-one
margaritas together at Happy Hour every Thursday.

To gauge if this individual understands this important need for separation between colleagues
and best friends, inquire during the interview about whether direct reports respect or fear this
person. Ask if they believe it’s possible to solicit both reactions from the same group.

The ability to access and use employees’ strengths

When you’re involved in running a business, you have to get good at learning how to let your
employees shine. If you’re trying to put a highly creative, imaginative person in a very cut and
dry role, you may end up frustrated when they spend too much time daydreaming and forget to
fill out an Excel spreadsheet you need by 5 p.m.

On the flip side, if you’re asking for a few killer ideas for Q3 from a person who loves
functionality and numbers, don’t be shocked when you get several lackluster thoughts about
Customer Appreciation Day and nothing worth presenting to the rest of the team.

They say you shouldn’t try to jam a square peg into a round hole, and this is true when it comes
to guiding a team. Each employee within the organization will have strengths and weaknesses, as
well as passions and things they just can’t stand to do. A good leader knows how to recognize a
team member’s strengths and utilize them effectively within the office.

Their ability to assess risks effectively

A skilled leader knows how to calculate risk. If they never try something new, it’s tough for the
business to grow. At the same time, if they’re constantly putting the company on the line just
because the gamble might one day pay off, the entire brand suffers.
To find out whether this individual has an appropriate level of risk-taking in them, ask about the
biggest risk they’ve takens. Try to get a sense of what their thought process was like as they
decided whether to take this chance, and what they did to reduce the likelihood of failure.

Those who shoot first and ask questions later are a poor choice for a leadership role, as they can
take the company down a dangerous path with their poorly planned decisions. However, those
who carefully weigh the pros and cons can help the brand grow in a big way.

There are several other key traits to keep an eye out for when you’re looking to hire your
company’s next great leader. Beyond the practical skills and experience you want an individual
to have as they step into a leadership role, here are some skills to be on the lookout for:

Measuring the effects of leadership:-

Much has been written about the importance of measuring the impact of leadership development
programs or systems. Over the years I’ve been looking for practical, meaningful, and effective
metrics. Here’s what I’ve settled on for now, and although I’m not completely satisfied with any
single measure, a combination of these should give you a pretty good dashboard.

1. Company performance. The ultimate measure, nothing else really matters. In most cases,
consistent great company performance can usually be attributed to great leadership. And of
course, lousy leadership is usually the root cause of business failures.

2. External perception of leadership. External perception can be measured by awards, such as

CEO Magazine “Best Companies for Leaders” and hundreds of individual leadership awards
(CEO of the Year, CIO of the year, CFO of the Year, etc…).

3. Internal perception of leadership. Internal perception can be measured in two ways. First, if
you’re using 360 leadership assessments, you can maintain an aggregate score of a single
“overall effectiveness” question, or run a report that aggregates the average score for all
questions. Second, you can pull questions out of your annual employee survey pertaining to
leadership and look for year over year improvement. You can also compare your leaders to other
companies if you’re using questions provided by a third party vendor, such as Gallop or the
Leadership Practices Inventory.

4. Succession planning measures. Keep tract of the number of key positions filled by internal
candidates or the number of “ready now” candidates for each key positions (bench strength).

5. Individual Development Plan (IDP) progress or completion. Track the completion of

development activity for key leaders and succession candidate pools.

6. Leadership development training measures. 

Use the basic Kirkpatrick measures, satisfaction, knowledge, behavior change, and business
results. Easier said than done for the last one, but it works in some cases. For example, you
would expect a decrease in turnover and improvement in sales after the implementation of a
successful sales manger hiring or coaching program.
7. Finally, the easiest measure and perhaps the one that has the biggest impact on your funding
and career opportunities: ask your key stakeholders. Regular meetings with your top executives
and other key stakeholders will ensure you’re efforts are hitting the mark. These meetings are a
great way to continuously assess current and future needs, communicate your accomplishments,
and check for satisfaction.

Managerial derailment:-

Management derailment is an aspect of high-level, executive careers that most people don’t
consider, either because they do not know much about it or because they simply prefer not to
discuss it. Management derailment occurs when an individual with an executive-level position
fails at his job. For those who experience management derailment personally, the experience is
both discouraging and eye-opening. The term "management derailment" refers to the failure of
individuals who hold executive-level positions within a company. Many people mistakenly
assume that executives do not experience similar job or career turmoil to lower-level employees.
However, failure at the executive level is actually a relatively common occurrence. Management
derailment can occur because of either personal failure or external conditions. An example of
personal failure includes an executive's making a mistake that causes the termination of his
employment. On the other hand, an example of an external condition resulting in management
derailment includes economic conditions that force a company to lay off the executive. In
management, delegation of responsibilities allows managers to use staff resources to accomplish
more objectives. Though delegation is a key aspect of management, many managers feel
uncomfortable with delegation or reluctant to delegate for a variety of reasons. For these
managers, the disadvantages of delegation may seem to outweigh the benefits

The Disadvantages of Delegation in Management

Time
Some managers may find that delegation requires a considerable amount of time. In some
cases, managers may have to train staff to handle delegated tasks; depending on the task, the
training may take from a few minutes to several weeks. For simple tasks, managers may feel it
is easier and faster to simply do the task themselves than to train staff to take on the
responsibility.
Quality
Many managers need to delegate tasks that they have performed for a considerable period of
time. Managers with a passion for quality control may feel that they can perform the task better
than subordinates, and may feel that delegating will sacrifice quality for the sake of efficiency.
In some cases, managers do lose some measure of quality when delegating tasks, especially to
staff members who are unfamiliar with the work or who have little experience performing the
task. Managers can help counter the effects of delegation on quality by retaining quality-
control functions and approving staff members’ work, but doing so can take up time and offset
the benefits of delegating the task.
Enjoyment
Managers who truly love their work may find that delegating places some of their more
enjoyable tasks in the hands of others. Because managers have a responsibility to oversee a
department rather than to handle individual tasks, delegating tasks both mundane and
enjoyable is part of the job. This downside to delegation can become even more frustrating
when managers see their staff members doing work that the manager once enjoyed.
Relevance
When a manager delegates tasks, staff members can take credit for work the manager once
claimed as her own. For some managers, not getting credit seems like a loss of political or
social capital within the organization. In addition, some managers feel that delegating work
reduces the need for their position, and some managers fear losing their jobs because they have
delegated away their work. In many organizations, though, managers receive credit for the
work their teams perform; delegation in these organizations has a reduced effect on the
manager’s credit and relevance.
Communication
When a manager delegates work, she must explain the requirements and other key information
to the appropriate staff members. Miscommunication can result in poor quality and missed
objectives, so managers must make great efforts to properly communicate expectations. In
addition, managers must make themselves available to listen to employee concerns regarding
the delegated tasks and to answer questions as they arise.

Self-defeating behavior:-

For social psychologists, a self-defeating behavior is any behavior that normally ends up with a
result that is something the person doing the behavior doesn’t want to happen. If you are trying
to accomplish some goal, and something you do makes it less likely that you will reach that goal,
then that is a self-defeating behavior. If the goal is reached, but the ways you used to reach the
goal cause more bad things to happen than the positive things you get from achieving the goal,
that is also self-defeating behavior. Social psychologists have been studying self-defeating
behaviors for at least 30 years. And although they have identified several things that seem to lead
to self-defeating behaviors, much more can be learned about what self-defeating behaviors have
in common, and how to get people to reduce the impact of these behaviors in their lives. When
someone is viewing themselves in a negative light, their behavior tends to follow how they are
feeling about themselves. Usually it is a self-defeating behavior which keeps the person stuck
with low self-esteem.
Common Types of Self-Defeating Behaviors

Avoidance

Avoidance behaviors involve avoiding certain people or situations with the idea that it will also
mean avoiding hurt or pain. Avoidance can also show up as delaying doing things, stopping an
activity part way through, or giving something minimal effort. In the short-term, there is logic to
avoiding behaviors. If you don’t participate, you can’t lose. However, by the same token, you
can’t win if you don’t play.

Perfectionist

Perfectionist behavior means trying to do things perfectly, even if it isn’t possible to be a 100%
right, a 100% of the time. A person with low self-esteem may show some perfectionist behavior,
thinking that being perfect will make everything okay. Trying to do things perfectly can cause
enormous amounts of stress and anxiety, which in the long-term isn’t very good for self-esteem.

Take the example of Anna, who was very concerned about her appearance. She spent a lot of
time before school doing her make-up and hair. When it came to doing sports or going to the
beach with others though, she was always trying to find an excuse for fear that people would see
her looking less than perfect.

Hiding

Hiding behaviors occur when a person is ashamed or embarrassed to show their real self. They
might try to cover up parts of their identity, such as sexuality, personality traits, or appearance.
People with low self-esteem may engage in hiding behaviors because they feel it will make them
more like everyone else, and therefore able to fit in.

Passive

When people are passive, they don’t stand up for their rights and believe that others are
somehow more worthy than they are. Passive people are those hunched in the corner of room,
arms crossed, tapping their feet. Typical passive behaviors include staying quiet even when you
have something to say, steering clear of tensions, apologizing for no reason, and always agreeing
even when you don’t really want to.

Attention-Seeking

Sometimes people with low self-esteem are so concerned with getting the approval of others that
they act in ways that may be dangerous. Other times, they are constantly seeking positive
feedback from others.

Aggressive

Sometimes a person becomes aggressive as a way of shielding others from their low self-esteem.
They literally become defensive and lash out at others. Aggressive behavior can include physical
acts, but also includes shouting, bullying and demeaning others.
Developing the planning and pipeline:-

If leadership skills are on your talent wishlist, you’re not alone. Almost half of the companies
surveyed for Workplace Trends’ Global Workforce Leadership survey in February and March
said that leadership is the hardest skill to find in employees. What’s more, among the 1,000
employees surveyed, only 36 percent said leadership is a strength in their organization.

The natural leaders you’re looking for may not exist — you need to develop them, and a
leadership pipeline is key. Just as a talent pipeline ensures you have a steady stream of
employees, a leadership pipeline is a constant cycle of recruiting and developing leadership
potential.

Here are a few steps to create a strong leadership pipeline and grow the leaders you’re looking
for:

Bring in fresh talent

A successful leadership pipeline is made up of both internal and external talent. You need a
recruitment plan in place to have a steady stream of talent to develop. This means looking for
fresh talent to take entry level positions as you move internal talent into leadership positions. In
other words, you need to always be recruiting.

Put a plan in motion to recruit recent graduates. Attend career fairs at local colleges, launch
internship programs, and create a strong social media and online presence to attract young talent.
A graduate recruitment program is the future of the company, so take the time to think about
which skills and characteristics are the most important.

Are you looking for an outstanding student with hands on experience, or are attitude and
enthusiasm bigger priorities?

Screen for leadership potential

Leadership isn’t for everyone, and you need to determine which talent should be put on the path
to leadership. In fact, a study conducted by Gallup found that just 18 percent of current managers
have the talent required for the role.

What makes a manager highly talented? Great managers possess a rare combination of five traits,
according to the Gallup study — they motivate their employees, assert themselves to overcome
obstacles, create a culture of accountability, build trusting relationships, and make informed
decisions for the good of their team and company.

But just one in 10 people possess all five of these ideal talents. The study also found that two in
10 people possess some of these traits and can become successful managers with the right
coaching and development.

Screen employees for these qualities when building your leadership pipeline. If you think an
employee has leadership potential, speak with their coworkers and direct manager about their
relationships at work. Determine how they act under pressure and if they’re a team player. A
good candidate for leadership will consider the needs of others, have strong relationships with
their coworkers, and take responsibility for their work and mistakes.
 

Prepare employees for leadership

Once you have identified those with potential, don’t just throw them into a leadership position —
training and development are a major part of the leadership pipeline.

You may already provide training to potential leaders, but is it valuable? After all, 39 percent of
companies surveyed by Workplace Trends offered leadership development programs, but just 15
percent of employees felt it effectively prepared them for their next role.

Personalizing training programs can make them more engaging and effective. The 2013-14
Benchmarking study conducted by Towards Maturity found that 86 percent of employees
surveyed learn what they need to know from work by collaborating with others.

Set up a mentoring program in which seasoned managers offer advice to aspiring leaders.
Employees can ask them questions, shadow them, and have one-on-one meetings and
discussions.

Continue developing managers

Development doesn’t end when leaders assume their positions. The final stage of the leadership
pipeline is engaging and supporting leaders with continued learning.

According to another report released by Gallup in April, only 35 percent of managers are

engaged at work. And when managers are disengaged so are the employees they lead. The study
found that employees who are supervised by highly engaged managers are 59 percent more
likely to be engaged than those supervised by actively disengaged managers.

Invest in leaders, and give them resources and tools to grow professionally and cultivate their
skills. Offer them online courses, and allow them to attend conferences and events. Speak with
leaders individually to determine which skills they want to strengthen, which topics interest
them, or what type of education would be most beneficial to them.

Natural leaders are hard to find, but shifting the focus to developing leaders, instead of finding
them, can ensure your organization has talented leaders for years to come.

Professional development:-

Professional development is thus composed of a series of events and activities related to a

particular profession, creating or developing sets of skills, knowledge, and attitudes in the areas
of people’s performance [16]. In this sense, the focus of the concept of professional development
is on a combination of cognitive, affective, and behavioral processes, involving formal and
informal learning strategies throughout the career. Professional development is directly related to
the day-to-day activities of workers and should be part of a broader process of continuous
learning [10]. Professional development corresponds to the growth and maturation of the
knowledge, skills, and attitudes acquired throughout the workers’ lives, as a result of formal and
informal actions of learning at work [n this broader view of the professional development
process, it stems from formal or informal learning actions [18], being directly related to career
progression [11]. Thus, the concept of professional development encompasses a variety of
practices, such as: activities in scientific societies [19]; training processes, including acting as
supervisor, coach, or leader (mentoring and monitoring of actions to students, subordinates, or
new professionals) [20]; training and strategies for systematized and informal learning for skills
development [16, 21, 22]; in-service training [5, 23]; participation in communities of practice
[24, 25]; participation in processes of continuous professional development [5, 26]; peer
collaboration mediated by technological resources [27, 28]; mentoring programs [29]; and
specific leadership development programs. Professional development is therefore associated with
the acquisition and development of competences involving cognitive, affective, and psychomotor
processes. As a result, there are constant changes in terms of Knowledge (to know), Skills
(know-how), and Attitudes (knowing how to be) [36]. It must also be considered that the process
of professional development involves different stakeholders (workers, organizations, and
society) and can be driven (pusher) or braked (barriers) by a set of contextual elements (job
opportunities, type of organization, support received from peers and managers, characteristics of
the socioeconomic environment, etc.), individual elements (initiative, dynamism, courage to risk,
determination, resilience, etc.), or relational elements (network, work teams, etc.) [33]. Figure
1 summarizes different aspects related to the professional development process. At present,
professional development is an area of growing interest, mainly due to its implicit consequences,
such as self-esteem, self-efficacy, motivation, job satisfaction, and employability [70] the
performance of various job duties and responsibilities [23] and the increase it provides in job
satisfaction [71]. Thus, such development is relevant to both the workers themselves and the
labor and development organizations of the country. As a result, investments in actions aimed at
professional development have grown in the international scenario. It is also necessary for
leaders to understand that the workplace is a complex social system made up of peers who
consistently coregulate each other’s learning [72]. Thus, if leaders invest in social interactions,
they can foster informal learning at work, transforming everyday work practice into a space for
the continuous production of collective knowledge.

Professional development Methods

1. Training

2. Task/job rotations

3. Coaching

4. Mentoring

5. Workshops/Committees/Working-Groups

6. Simulations

7. Conferences

8. On-the-job development

9. Self-study

10. 360-degree performance review

11. Career planning

Employees and employers have various ways to go about putting employee skills development
into practice.

The overreaching goal is to strengthen employee’s broad range of skills, whether it be flexibility,
organizational, creativity, communication or leadership.

Some of the most effective employee development methods include:

1. Training

This method includes developing employee skills through a combination of lectures, hands-on-
exercises, videos, podcasts, simulations, and individual/group-based assignments.

It includes both formal (classroom-based, instructor-led, eLearning courses) and informal

(watching YouTube videos, reviewing educational blogs and posts on peer-group forums like
LinkedIn or chat rooms, self-study) approaches to skills development.

Each option will be specific to an organization’s needs, and the subject at hand.

For example, a hands-on, instructor-led training may be the best option to teach a detailed
process or trade e.g. a complex manufacturing process or preparing a signature dish for a
restaurant.

These extremely specific tasks cannot be taught via YouTube or research, which may suffice for
more general subjects such as building codes or IT support issues.

Employees must actively undergo training (either paid for by themselves or by the organization)
throughout their career to enhance skills they (in consultation with their managers/supervisors)
deem necessary for the role they are performing.

However, organizations must also actively support employee skills development for future
roles/responsibilities that the company hopes to entrust these employees.

IDEAL FOR:
Training is an ideal employee development method when it comes to addressing both Hard
(technical) and Soft (communications, conflict resolution, time management) skills.

2. Task/job rotations

Employees could volunteer to rotate roles with colleagues on a shift/team, to put some of those
new skills into practice.

Employers can also encourage job sharing as a method for employees, who have indicated their
desire to get practical experience, to develop some additional skills.
The goal is to rotate the tasks and roles to learn something new or have a chance to practice what
has been learned.

Stretch assignments: This method involves management working with employees to understand

where they wish to improve, and then finding assignments for employees to develop those skills.

Typically, the assignments will push the boundaries of an employee’s existing

role/responsibility, to expand its scope to include additional skills needing development.

Stretch assignments could either be horizontal (tasking an employee to use additional skills to do
more work similar to – though not the same - their existing role), or vertical (extending the scope
of an employee’s role to cover down-stream or up-stream responsibilities).

IDEAL FOR:
This employee development method is the best way to train flexibility and adaptability.

It is also great for extending an employee’s technical skills but, depending on the type of stretch
goals set, could aid in developing other ancillary skills such as Time Management, Stress
Management, and Conflict Resolution Skills.

Everything depends on the role/job for how applicable this is. For example, if you ask a
developer to talk/negotiate with clients, he probably won’t be as great as the manager, but at least
he’ll gain the project management skill to some extent.

3. Coaching

When talking about various employee development methods and their benefits, we can’t stress
the importance of helping employees polish their skills through coaching.

This method of skills development typically involves senior staffers working one-on-one with
less experienced individuals.

This can fast-track an employee's understanding of a variety of topics, but be mindful that this
approach can be both times consuming (taking up the assets of seasoned/valuable staff) and
result in a clone-like knowledge of the subject – as opposed to an employee learning the subject
his/her way or through input from a broad range of coworkers and mentors.

IDEAL FOR:
Depending on the emphasis of the coaching involved, this can be a fast-track way to learning
very specific leadership and team management skills. It can also be focused on particular
organizational skills.

Coaching is usually a very hands-on approach to skills development and ideal for developing
skills like Technical and Analytical skills. Through employer-sponsored coaching camps,
employees could also pick up invaluable Interpersonal and Conflict Resolution skills.
4. Mentoring

This method involves senior leaders/management taking junior staff under their wing to help
develop important skills that the mentored individual might lack.

The more formal mentoring programs are typically used for senior executive/leadership roles,
while less formal structures might be implemented amongst junior management as well.

As with Coaching, be mindful of the time asset, and the even narrower funnel of a one-on-one
teaching model.

IDEAL FOR:
Because it requires senior leadership commitment, Mentoring is typically used to develop high-
level skills such as Leadership, Strategic Management, Communication, Critical Thinking, and
Long-term Vision articulation.

Mentoring isn't very effective in developing skills required at lower levels of the organizational
structure – such as Shop Floor Assistant or Accounting Supervisor. Coaching might be a better
method for skills development at those levels.

More experienced employees can mentor less experienced, younger employees and isn't
necessarily restricted to management. It can be done at any professional level and is ideal for
communication skills, leadership skills, and organizational skills. It can also be applied to
teaching something new or even teaching creativity.

5. Workshops/Committees/Working-Groups

These are methods that give employees an opportunity to interact with peers/colleagues from
within and external to the organization.

The benefit here is rich access to similar colleagues (internal) and dissimilar colleagues
(external).

This broad range of input and knowledge can be useful in gaining new insights, troubleshooting,
and opening up communication on best practices.

This is ideal for communication skills and teamwork but can also be applied to anything else.

IDEAL FOR:
Workshops are great for developing a range of soft skills, such as Communications, Teamwork,
Presentation, Public Speaking, Networking, and Leadership skills. It can also be used to polish
Research and Analytical skills.

6. Simulations

These are becoming very popular due to both how engaging and effective they have become.
In its simplest form, a simulation could be role-playing a customer service interaction, for
example, learning how to diffuse an irate and confrontational client in person, or responding to
an emergency situation such as mock first aid scenarios.

At its highest level, simulations can involve completely virtual worlds, such as fire rescue or
flight training where employees can learn the skills required in a nonconsequential setting.

This is extremely useful in taking conceptual or textbook knowledge and applying it to the real
world which gives the employee both the know-how as well as the exposure and comfortability
in handling such tasks.

IDEAL FOR:
Works for all types of skills. Group simulations can even be utilized to teach social skills.

7. Conferences

Much like workshops and committees, conferences are a useful way to network and gain
exposure to a vast knowledge base of both interdisciplinary and outside industries.

Specific sessions are generally available to increase awareness and training of relevant topics,
often in a pick and choose a format that can be of interest/usefulness to particular subgroups
within an organization.

IDEAL FOR:
Dependent upon the conference’s applicability and specificity, they work for all types of skills,
including hard and soft skills and personal development. It can additionally assist with
communication skills.

8. On-the-job development

Employees who have attended some basic training on a technical skill (whether it be in operating
a new machine, or learning new financial analysis methods) will often find on-the-job
development a great method to hone those skills.

This is basically learning by doing, which is typically done right after the training.

The main goal of on-the-job development is to provide everything to the employee for self-study
while at work. Employees learn how to use something or apply the methods as they complete the
assigned tasks.

This is a very popular way to develop employees as companies typically don’t have the time to
train every single employee on every single skill especially if that skill does not require
specific/advanced knowledge.
IDEAL FOR:
While on-job exposure is typically good for work-specific skills development, this method can
also develop a broad variety of employee skills, including hard and soft skills.

These range from technical skills, leadership development, and analytical expertise as well as
organizational skills such as time management, multi-tasking, and prioritization.

9. Self-study

This can be accomplished through different methods: reading/researching, taking classes, etc.
outside of work hours.

The subject doesn't always relate to the skills that an organization needs, but rather something
new that they believe will improve their performance.

While the time invested for self-study isn't directly compensated, if an employee purchased a
course that will improve his performance, the company should compensate him by paying for
that course.

The benefit is that the employee decides what’s of interest, and pursues it independently.
Conversely, it is often difficult to motivate employees to spend off-work time devoted to work-
related endeavors.

IDEAL FOR:
This is a great means to develop creativity and curiosity, as employees will naturally choose
topics of interest/passion. Depending on the material studied, however, it could be applicable to
all skills.

Bonus:

10. 360-degree performance review

This method involves getting feedback about an employee, from a cross-section of peers,
subordinates, supervisors and external vendors, and then identifying skills development
opportunities based on those inputs.

For more information on this type of feedback consider this article: Performance Appraisal.

IDEAL FOR:
Because of the fairly broad scope of feedback, this method relies upon, it is typically good for
identifying skills gaps in people-facing roles, including Conflict Resolution, Communications,
Tactfulness, and Interpersonal skills.
11. Career planning

While this method is usually viewed as something that is "employer-driven" – where HR

decides which employee should fill what role – it shouldn't be so!

Employees can also suggest future/alternative career paths for themselves, to their
supervisors/managers, and initiate career planning discussions.

Based on a business goals review and organizational workforce assessment (see Employee

development plan), employers can identify existing skills that need to be enhanced across the
organization, or prospective new skills that the business must acquire.

Through discussions with management, individual employees should then analyze their own
strengths and shortcomings, and volunteer to take on some of those roles. Individual career plans
can then be mapped out, in consultation with HR, with specific skills development milestones
identified for each role.

Leader-member exchange theory:-

The leader–member exchange (LMX) theory is a relationship-based approach to leadership that focuses on

the two-way (dyadic) relationship between leaders and followers. [1] Previous research shows that better LMX
results in more resources being available to subordinates and restricted information. Employees in a mobile
phone company with better LMX, characterized with a high degree of mutual trust, were more willing to share
their knowledge [2]
The latest version (2016) of leader–member exchange theory of leadership development explains the growth of
vertical dyadic workplace influence and team performance in terms of selection and self-selection of informal
apprenticeships in leadership.[3] It suggests that leaders select the best and make offers and members of team
accept or not. Apprentices who complete the program develop strong emotional attachments with their mentor-
teacher. This is reflected in their descriptions by both of their relationship as one of mutual respect for
competence, trust in character and benevolence toward each other. [4] Those who complete the apprenticeship
training are more collaborative, helpful to all team members, more deeply engaged in team activities and
contribute more to team health and prosperity. This is seen as a win-win relationship by both parties, their
team, network and overall organization.[5]
The goal of LMX theory is to explain the effects of leadership on members, teams, and organizations.
According to the theory, leaders form strong trust, emotional, and respect-based relationships with some
members of a team, but not with others. [6] LMX theory claims that leaders do not treat each subordinate the
same. The work-related attitudes and behaviors of those subordinates depend on how they are treated by their
leader

Strengths of LMX Theory

LMX theory is an exceptional theory of leadership as unlike the other theories, it concentrates and talks
about specific relationships between the leader and each subordinate.
 LMX Theory is a robust explanatory theory.

LMX Theory focuses our attention to the significance of communication in leadership. Communication is a
medium through which leaders and subordinates develop, grow and maintain beneficial exchanges. When
this communication is accompanied by features such as mutual trust, respect and devotion, it leads to
effective leadership.

LMX Theory is very much valid and practical in it’s approach.

Criticisms of LMX Theory

LMX Theory fails to explain the particulars of how high-quality exchanges are created.

LMX Theory is objected on grounds of fairness and justice as some followers receive special attention of
leaders at workplace and other followers do not.

Understanding the Theory

The Leader-Member Exchange Theory first emerged in the 1970s. It focuses on the relationship
that develops between managers and members of their teams.

The theory states that all relationships between managers and subordinates go through three
stages. These are:

Role-Taking.

Role-Making.

"Routinization."

Let's look at each stage in greater detail.

1. Role-Taking

Role-taking occurs when team members first join the group. Managers use this time to assess
new members' skills and abilities.

2. Role-Making

New team members then begin to work on projects and tasks as part of the team. In this stage,
managers generally expect that new team members will work hard, be loyal and prove
trustworthy as they get used to their new role.
The theory says that, during this stage, managers sort new team members (often subconsciously)
into one of two groups.

In-Group - if team members prove themselves loyal, trustworthy and skilled, they're put into the
In-Group. This group is made up of the team members that the manager trusts the most.
Managers give this group most of their attention, providing challenging and interesting work,
and offering opportunities for additional training and advancement. This group also gets more
one-to-one time with the manager. Often, people in this group have a similar personality and
work-ethic to their manager.

Out-Group - if team members betray the trust of the manager, or prove that they're unmotivated
or incompetent, they're put into the Out-Group. This group's work is often restricted and
unchallenging. Out-Group members tend to have less access to the manager, and often don't
receive opportunities for growth or advancement.

3. Routinization

During this last phase, routines between team members and their managers are established.

In-Group team members work hard to maintain the good opinion of their managers, by showing
trust, respect, empathy, patience, and persistence.

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Out-Group members may start to dislike or distrust their managers. Because it's so hard to move
out of the Out-Group once the perception has been established, Out-Group members may have to
change departments or organizations in order to "start over."

Once team members have been classified, even subconsciously, as In-Group or Out-Group, that
classification affects how their managers relate to them from then on, and it can become self-
fulfilling.

For instance, In-Group team members are often seen as rising stars and the manager trusts them
to work and perform at a high level. This is also the group that the manager talks to most,
offering support and advice, and they're given the best opportunities to test their skills and grow.
So, of course, they're more likely to develop in their roles.

This also holds true for the Out-Group. The manager spends little, if any, time trying to support
and develop this group. They receive few challenging assignments or opportunities for training
and advancement. And, because they're never tested, they have little chance to change the
manager's opinion.

Using the Theory

You can use the Leader-Member Exchange Theory to be aware of how you perceive members of
your own team.

To do this, follow these steps:

1. Identify Your Out-Group

Chances are, you know who's in your Out-Group already. Take a moment to note their names
down.

Next, analyze why these people have fallen "out of favor." Did they do something specifically to
lose your trust? Do they exhibit bad behavior at work ? Are they truly incompetent, or do they
have low motivation?

Analyze what they've actually done, and compare the facts with your perceptions. Do these
match, or have you (perhaps subconsciously) blown things out of proportion?

2. Reestablish the Relationship

It's important that, as the leader, you make a reasonable effort to reestablish a relationship with
Out-Group team members. Research published in the Leadership Quarterly journal in 1995
showed that team members who have high quality relationships with their leader have higher
morale, and are more productive than those who don't. So you, and your organization, can
benefit from creating a better relationship.

Keep in mind that this group will likely be wary of any attention or support from you; after all,
they may not have had it in the past.

First, meet each team member one-on-one. Take the time to find out if they're happy with their
job. What are their career goals? What can you do to make their work more challenging or
engaging?

A one-on-one meeting can also help you identify that person's psychological contract  with you -
that is, the unspoken benefits they expect from you, as their leader. If they're in the Out-Group,
they may feel that the psychological contract has been broken.

You also need to discover what truly motivates them. Use McClelland's Human Motivation
Theory  or Herzberg's Motivators and Hygiene Factor Theory to find out what drives them to
succeed.

Once you've had a chance to reconnect with your team members through one-on-one meetings,
do what you sensibly can to continue to touch base with them. Practice management by walking
around , or drop by their office to see if they need help on projects or tasks. Work on getting to
know these team members on a personal level.

3. Provide Training and Development Opportunities

Remember, the biggest advantage to the Leader-Member Exchange Theory is that it alerts you to
the preference you might unconsciously - and possibly unfairly - be showing some team
members; this allows you to offer all of your team members appropriate opportunities for
training, development, and advancement.

Your Out-Group team members may benefit from a mentoring  or coaching  relationship with

you.

You may also want to provide them with low risk opportunities to test and grow their skills.
Use task allocation  strategies to make sure you're assigning the right task to the right person.
Also, take our Bite-Sized Training session, Setting Goals for Your Team , to learn how to set
effective and realistic goals for these team members.

You can also use the Nine-Box Grid for Talent Management  to re-assess their potential from
time to time, and to give them the right development opportunities.

Warning:

A problem with the Leader-Member Exchange Theory is that it assumes that all team members
are equally worthy of trust, prestigious projects and advancement. Although we may like to think
that everyone is honest, hard-working and worthy of our esteem, the reality can be different!

Managers need to get the best possible results. This means putting the right people in the right
places, and it means developing and reinforcing success. Of necessity, this means that talented
people will get more interesting opportunities and may get more attention than less-talented ones.

Use the Leader-Member Exchange Theory to make sure that you're objective in the way that you
deal with people, but don't be naïve in the way that you apply it.

Key Points

The Leader-Member Exchange Theory first appeared in the 1970s. It analyzes the relationship
between managers and team members.

Team members typically go through three phases in their relationship with their manager: Role-
Taking, Role-Making, and Reutilization.

Typically, during the Role-Making phase, group members are classified into one of two groups:
In-Group, and Out-Group. In-Group team members often receive more attention and support,
and more opportunities, from their managers. Out-Group members get very little face time, and
few opportunities.

You can use the Leader-Member Exchange Theory to identify and validate any perceptions that
you might have of people on your team.
 Unit -3
Leadership Power, Influence and Negotiation

An essential part of leadership is to influence the people you lead so that they'll follow your
instructions. The influence of a leader will depend on a variety of factors including their
personality and the personality of their followers. The influence of a leader over his followers is
often referred to as power. Leadership power is the influence that leaders have over their
followers. It persuades others to support their efforts and do as they ask. Influence is essential to
leadership because leaders cannot exist without it. It is also a key component of power and
authority.
Power and authority are often used interchangeably but their meanings have nuanced differences.
Power is the influence someone has over another. It refers to the ability to accomplish a goal
with the help of others. Authority is the right to exercise that influence. According to Sheriff,
“Power denotes the relative Weights of behavior by a member in a group structure.”

Supervisors have authority because of their position in the workplace. They possess a type of
power because of this, but a staff member can also have power if they are well-liked by
colleagues. The staff member has no authority but colleagues are willing to follow them because
of their relationship.
sources of power:-

Formal Power

Formal power is based on an individual’s position in an organization. Formal power

can come from the ability to coerce or reward, from formal authority, or the control of
information.

The formal power is based on rank—for example, the fire chief or the captain.

Legitimate Power

In the formal groups and organizations, probably the most frequent access to one or
more of the power bases is one’s structural position. This is called legitimate power.

Legitimate power is also known as positional power. It’s derived from the position a
person holds in an organization’s hierarchy.

Job descriptions, for example, require junior workers to report to managers and give
managers the power to assign duties to their juniors. For positional power to be
exercised effectively, the person wielding it must be deemed to have earned it
legitimately.

An example of legitimate power is held by a company’s CEO.

Expert Power

Expert power is influence wielded as a result of expertise, special skill, or knowledge.

Expert power is derived from possessing knowledge or expertise in a particular area.

Such people are highly valued by organizations for their problem-solving skills.

People who have expert power perform critical tasks and are therefore deemed
indispensable. The opinions, ideas, and decisions of people with expert power are held
in high regard by other employees and hence greatly influence their actions.

Possession of expert power is normally a stepping stone to other sources of power

such as legitimate power.

For example, a person who holds expert power can be promoted to senior
management, thereby giving him legitimate power.

Referent Power

Referent power is based on identification with a person who has desirable resources or
personal traits.

If I like, respect, and admire you, you can exercise power over me because I want to
please you. It is derived from the interpersonal relationships that a person cultivates
with other people in the organization.

People possess reference power when others respect and like them. Referent power is
also derived from personal connections that a person has with key people in the
organization’s hierarchy, such as the CEO.

It’s the perception of the personal relationships that she has that generates her
power over others. •

Coercive Power

Coercive power is derived from a person’s ability to influence others via threats,
punishments or sanctions.

A junior staff member may work late to meet a deadline to avoid disciplinary action
from his boss. Coercive power is, therefore, a person’s ability to punish fire or
reprimand another employee.

Coercive power helps control the behavior of employees by ensuring that they adhere
to the organization’s policies and norms.
Reward Power

The opposite of coercive power is reward power. People comply with the wishes or
directives of another because doing so produces positive benefits; therefore, one who
can distribute rewards that others view as valuable will have power over those others.

These rewards can be either financial – such as controlling pay rates, raises, and
bonuses; or nonfinancial – including merit recognition, promotions, interesting work
assignments, friendly colleagues, and preferred work shifts or sales territories.

In an organization, people who wield reward power tend to influence the actions of
other employees. Reward power, if used well, greatly motivates employees.

But if it’s applied through favoritism, reward power can greatly demoralize employees
and diminish their output.

Informational Power

Informational power is where a person possesses needed or wanted information. It

comes from access to and control over information. This is a short-term power that
doesn’t necessarily influence or build credibility.

For example, a project manager may have all the information for a specific project
and that will give him/her “informational power.”

But it’s hard for a person to keep this power for long, and eventually, this information
will be released.

This should not be a long-term strategy.

Connection Power

It is where a person attains influence by gaining favor or simply acquaintance with a

powerful person.

This power is all about networking. If I have a connection with someone that you
want to get to, that’s going to give me power.

People employing this power build important coalitions with others. It is a natural
ability to forge such connections with individuals and assemble them into coalitions
that give him/her strong connection power.
 Political Power

This power comes from the support of a group. It arises from a leader’s ability to
work with people and social systems to gain their allegiance and support.

It develops in all the state-owned organizations, especially when a certain political

party holds power and their supporters show power in many aspects in the
organizations.

By using political power, leaders can influence others and get some facilities from the
organization.

Charismatic Power

Charismatic power is an extension of referent power stemming from an individual’s

personality and interpersonal style.

Charismatic leaders get others to follow them because they can articulate an attractive
vision, take personal risks, demonstrate environmental and follower sensitivity, and
are willing to engage in behavior that most others consider unconventional.

But many organizations will have people with charismatic qualities who, while not in
formal leadership positions, nevertheless can exert influence over others because of
the strength of their heroic qualities.

The above-mentioned bases/types of power are normally practiced in many

organizations.

But, indeed, all the powers are not seen in a single organization. The uses of powers
vary organization to organization, time to time, person to person, situation to situation,
etc.

Uses of power
Power can be used by a variety of people in a variety of ways. A useful perspective
for studying the uses of power is illustrated in the table. The table encompasses two
related aspects;

1. power bases, requests from individuals possessing power and probable

outcomes as correlated in the form of prescriptions for the manager, and

2. general guidelines for the exercise of power.

The three potential outcomes of a person’s attempted use of power, as indicated in

above depend on:
1. The leader’s power base

2. How that power base is operationalized; and

3. Certain characteristics of the follower

Commitment is the likely outcome when the follower identifies with the leader and
accepts the leader’s power attempt. Compliance is probably the outcome when the
subordinate is willing to accept the leader’s desires, provided acceptance does not
require extra effort on the subordinate’s part.

Resistance is the usual outcome when the subordinate is unwilling to comply and may
even deliberately neglect to ensure that the leader’s wishes are not realized.

Sources of Leader Types of outcome

Influence
Commitment Compliance Resistance

Referent Power Likely, if the Possible, if the Possible, if the request

request is believed request is perceived is for something that
to be important to to be unimportant to will bring harm to the
the leader the leader leader

Expert Power Likely, if the Possible, if the Possible, if the leader

request is request is persuasive is arrogant and
persuasive and but the subordinates insulting, or the
subordinates share are apathetic about subordinates oppose
the leader’s task task goals. task goals
goals.

Legitimate Power Possible, if the Likely, if request or Possible, if arrogant

request is polite order is seen as demands are made or
and very legitimate request does not
appropriate. appear proper.

Reward Power Possible, if used in Likely If used in a Possible If used in a

a subtle, very mechanical, manipulative, arrogant
personal way. impersonal way. way.

Coercive Power Very unlikely Possible, if used in a Likely, if used in a

 helpful, non-punitive hostile or manipulative
way way.

Using Referent Power

As shown in Figure referent power can be a great asset to a leader. Leaders can
develop and maintain referent power through the following activities:

 The subordinate fairly and equitably

 Defining the subordinate’s best interests

 Demonstrate sensitivity to the needs and feelings of the subordinates.

 Select subordinates that are similar to the leader.

 Be an active and positive role model.

Using Expert Power

Expert power can also be of considerable help to the leader in achieving subordinate
acceptance. To reach and hold a high level of expert power, a leader should:

 Promote his or her image of expertise

 Maintain expert credibility

 Behave in a confident and decisive manner

 Keep informed and up-to-date.

 Recognize the concerns of subordinates.

 Avoid threatening the self-esteem of subordinates.

Using Legitimate Power

Leaders exercise legitimate power by formally and consistently requesting

subordinates to do things that help the group achieve pre-established group objectives.

Guidelines for the use of legitimate power include the following:

 Always be cordial and polite with subordinates.

 Maintain an air of confidence in the legitimate power role.

 Clarify instructions carefully and follow-up to verify understanding.

 Be certain that the request is appropriate.

 Explain the reasons for the request.

 Follow proper organizational channels.

 Exercise legitimate power regularly and consistently.

 Demonstrate sensitivity to the concerns of subordinates.

Using Reward Power

Reward power is generally the easiest and most enjoyable power base for both the
leader and the subordinate. The potential values of the reward power base can be
maximized by adhering to a few basic guidelines, as follows:

 Verify performance and compliance

 Make requests to subordinates that are both feasible and reasonable.

 Make only those requests that are ethical and proper.

 Offer and distribute rewards that are desired by the subordinates.

 Offer only those rewards that are credible. –

Using Coercive Power

Coercive power is the most difficult and unpleasant power to administer. The use of
coercion is almost certainly going to cause some resentment and, in some cases, it can
result in large scale resentment and retaliation.

Even minor resentment tends to erode the referent power of the leader. About the best
that a leader can hope for as a result of using coercion is compliance, and that is
possible only if the coercion is applied in a helpful, non-punitive manner.

However, every time coercive power is utilized, the leader must recognize that
resistance is the most common outcome. To minimize the amount of resistance and to
nurture compliance the leader must:

 Be sure that all subordinates fully understand all rules.

 Warn subordinates before punishing them.

 Administer punishment uniformly and consistently.

 Be sure you fully understand the situation before acting.

 Maintain leader credibility.

 Be certain that the punishment matches the infraction.

 Always punish in private.

When managers, especially inexperienced managers, attempt the use of coercive

power, they should use great care to minimize the many negative consequences of the
action.

In punishing a given subordinate, the manager is in danger of winning the better but
losing the war. Punishment must be administered with a special blend of support,
good intentions, and firmness.

Principles of Power in Interpersonal Relationships

We know that there are many types of power and also have principles.

 Power as a Perception.

 The Principle of Least Interest and Dependence Power.

 Power as a Relational Concept.

 Power as a Resource-Based.

 Power as Enabling or Disabling.

 Power as a Prerogative.

The principles are discussed below;

Power as a Perception

Power is a perception in the sense that some people can have objective power, but still
have trouble influencing others. People who use power cues and act powerfully and
proactively tend to be perceived as powerful by others.
Some people become influential even though they don’t overtly use powerful
behavior.

The Principle of Least Interest and Dependence Power

The person with less to lose has greater power in the relationship.

Dependence power indicates that those who are dependent on their relationship or
partner are less powerful, especially if they know their partner is uncommitted and
might leave them.

According to interdependence theory, the quality of alternatives refers to the types of

relationships and opportunities people could have if they were not in their current
relationship.

There’s an inverse relationship between interest in the relationship and the degree of
relational power.

Power as a Relational Concept

Power exists in relationships. The issue here is often how much relative power a
person has in comparison to one’s partner. Partners in close and satisfying
relationships often influence each other at different times in various areas.

Power as a Resource-Based

Power usually represents a struggle over resources. The more scarce and valued
resources are, the more intense and protracted are power struggles.

The scarcity hypothesis indicates that people have the most power when the resources
they possess are hard to come by or are in high demand. However, scarce resource
leads to power only if it’s valued within a relationship.

Power as Enabling or Disabling

Power can be enabling or disabling. Research has been shown that people are more
likely to have an enduring influence on others when they engage in dominant behavior
that reflects social skills rather than intimidation.

Personal power is protective against pressure and excessive influence by others and/or
situational stress.

People who communicate through self-confidence and expressive, composed behavior

tend to be successful in achieving their goals and maintaining good relationships.
 Power can be disabling when it leads to destructive patterns of communication.

Power as a Prerogative

The prerogative principle states that the partner with more power can make and break
the rules. Powerful people can violate norms, break relational rules, and manage
interactions without as much penalty as powerless people. These actions may
reinforce the powerful person’s dependence power.

Besides, the more powerful person has the prerogative to manage both verbal and
nonverbal interactions. They can initiate conversations, change topics, interrupt
others, initiate touch, and end discussions more easily than less powerful people.

Contingency Approaches to Power

As in other areas of organizational behavior and management, contingency
approaches to power have emerged.

For example, Pfeffer simply says that power comes from being in the “right” place.
He describes the right place or position in the organization as one where the manager
has:

 Control over resources such as budgets, physical facilities, and positions that
can be used to cultivate allies and supporters.

 Control over or extensive access to information about the organization’s

activities, about the preferences and judgments of others, about what is going on, and
about who is doing it

 Formal authority.

There is some research support for such insightful observations, and there are also
research findings that lead to contingency conclusions such as the following:

 The greater the professional orientation of group members, the greater relative
strength referent power has in influencing them.

 The less effort and interest high-ranking participants are willing to allocate to a
task, the more likely lower-ranking participants are to obtain power relevant to this
task.

Besides these overall contingency observations, there is increasing recognition of the

moderating impact of the control of strategic contingencies such as organizational
interdependence and the extent to which a department controls critical operations of
other departments or the role of influence behaviors in the perception of power.
Also, the characteristics of influence targets have an important moderating impact on
the types of power that can be successfully used.

An Overall Contingency Model for Power

Many other contingency variables in the power relationship besides the target could
be inferred from the discussion of the various types of power, for example, credibility
and surveillance. All these variables can be tied together and related to one another in
an overall contingency model.

The classic work on the influence process by social psychologist Herbert Kelman can
be used to structure an overall contingency model of power. The model incorporates
the French and Raven sources of power with Kelman’s sources of power, which in
turn support three major processes of power.

According to the model, the target will comply to gain a favorable reaction or avoid a
punishing one from the agent.

This is the process that most supervisors in work organizations must rely on. But for
compliance to work, supervisors must be able to reward and punish (that has control
over the means to their people’s ends) and keep an eye on them (that is, have
surveillance over them)

People will identify not to obtain a favorable reaction from the agent, as in
compliance, but because it is self-satisfying to do so.

But for the identification process to work, the agent must have referent power – be
very attractive to the target – and be salient (prominent).

For example, a research study is Kelman found that students were initially greatly
influenced by a speech given by a very handsome star athlete; that is, they identified
with him.

However, when the students were checked several months after the speech, they were
not influenced. The handsome athlete was no longer salient; that is, he was no longer
at the forefront of their awareness, and his previous words at the later time had no
influence.

As discussed earlier, except for the handful of superstars, athletes are soon forgotten
and have no power over even their most avid fans. Once they have graduated or are
out of season, they lose their salience and, thus, their power.

Finally, people will internalize because of compatibility with their value structure.
 But, as the figure shows, for people to internalize, the agent must have an expert or
legitimate power (credibility) and, besides, be relevant.

This process of power is most effective.

Kelman, for example, found that internalized power had a lasting impact on the
subjects in his studies. Researchers have had problems constructing ways to measure
compliance, identification, and internalization.

However, this model of power does have considerable relevance as to how and under
what conditions supervisors and managers influence their people. Many must depend
on compliance because they are not attractive or do not possess referent power for
internalization to occur.

Kelman’s research showed that internalization had the longest-lasting impact and, as
shown in the model, does not need surveillance or salience.

In other words, what is generally considered to be leaders is more associated with

getting people not just to comply but also to identify with the leader and, even better,
to internalize what the leader is trying to accomplish in the influence attempt.

This internalization would be especially desirable in today’s highly autonomous, flat

organizations with cultures of Openness, empowerment, and trust.

Influenceabilitv of the Targets of Power

Most discussion of power implies a unilateral process of influence from the agent to
the target.

It is becoming increasingly clear, however, that power involves a reciprocal

relationship between the agent and the target, which is under the overall social
cognitive perspective taken in this text.

The power relationship can be better understood by examining some of the

characteristics of the target. The following characteristics have been identified as
being especially important to the influenceability of targets.

1. Dependency.

2. Uncertainty.

3. Personality.

4. Intelligence.
5. Gender.

6. Age.

7. Culture.

Dependency

The dependency of the target depends on the resources controlled by the agent. If the
dependency is high, power influence will be high or vice-versa.

The greater the target’s dependencies on their relationship to agents, the more targets
are influenced.

Uncertainty

Certainty or uncertainty in the mind of the agent about the appropriateness of his
behavior determines his influenceability.

Experiments have shown that more uncertain people are about the appropriateness or
correctness of behavior; the more likely they are to be influenced to change that
behavior.

Personality

There are various research studies show a relationship between personality and
influenceability. For example, people who cannot tolerate ambiguity or who are
highly anxious are more susceptible to influence.

Intelligence

Though there is no conclusive proof about the direct relationship between intelligence
and influenceability, it has been observed that more intelligent people are less
susceptible to influence generated by positional power.

Gender

Although traditionally it was generally thought that women were more likely to
conform to influence attempts than men because of the way they were raised, there is
no evidence that this is changing.

As women’s and society’s views of the role of women are changing, there is less of a
distinction of influenceability by gender.
 Age

A social psychologist has generally concluded that susceptibility to influence

increases in young children up to about the age of eight or nine and then decreases
with age until adolescence when it levels off.

Culture

The cultural values of a society have a tremendous impact on the influenceability of

its people. Characteristics of culture to which targets belong affect their
influenceability.

For example, people coming from a culture that is oriented to authority are highly
susceptible to influence while people coming from a culture having low authority
orientation are less susceptible to influence.

Power Dynamics
Power is understood as the ability to influence other people and events. It refers to a
capacity that A has to influence the behavior of B so that B acts following A’s wishes.

This definition implies a potential that need not be actualized to be effective and a
dependency relationship. Power may exist but not be used. It is, therefore, capacity or
potential.

One can have power but not impose it. Probably the most important aspect of power is
that it is a function of dependency. The greater B’s dependence on A, the greater is
A’s power in the relationship.

Dependence, in turn, is based on alternatives that B perceives and the importance that
B places on the alternative(s) that A controls. A person can have power over you only
if he or she controls something you desire.

The dynamics of power can be studied from several angles, viz., distribution,
dependency, uncertainty, compliance, indicators, power determinants, power
consequences, symbols, and reputation.

 Distribution.

 Dependency.

 Uncertainty.

 Compliance.
 Power Indicators.

 Determinants of Power.

 Consequences of Power.

 Symbols.

 Reputation.

Distribution

There is no rationale in the distribution of power among organizational members.

Some may yield more power than others.

Others, the power wielded by one member may be disproportionate to the

organizational position he holds. Those in power try to grab more of it. They strongly
resist any attempt to weaken the power they wielded.

An individual cannot have power at all times and in all places. He may be forced to
forgo his power or he may be stripped of it. He resists the attempt to weaken his
power, in the event of failure, he will try to form a coalition.

Dependency

As mentioned earlier, power largely depends on the dependency relationship.

The greater B depends on A, the greater the power of A on B. The greater the
dependency of an organization on a limited number of individuals, the greater the
power these individuals enjoy.

A person who cannot be easily displaced enjoys more power than others whose
services can be easily replaced.

Uncertainty

Organizations seek to avoid uncertainty as far as possible.

People who can absorb uncertainty wield more power. Uncertainty depends on the
nature of the organization. In a marketing firm, for instance, sales executives confront
uncertainty and naturally wield more power.
Compliance

Of all the types of power, people generally comply with legitimate power. People
perceive reward and coercive powers as weak for complying with the manager’s
requests.

Power Indicators

It is difficult to tell when power is being used. Those who use power usually do not
want others to know about it. Indeed, power is most effective when it is not visible.

People tend to resist the use of power when they see themselves being influenced in a
way that is contrary to their desires.

However, if the attempt to influence appears to be legitimate and rational, we are

more willing to comply and subject ourselves to the wishes of others. Frequently,
individuals who are using power fail to recognize what they are doing.

They honestly feel they are exerting a rational influence that can be justified for
legitimate reasons other than their wishes. They sincerely think their influence is
rational rather than political.

Determinants of Power

One method of assessing power focuses on the potential to exert influence and
consists of measuring how many determinants of power are available to each member.

One of the bases of power is expertise; therefore, individuals who possess better
knowledge and expertise can exert better influence in situations where their
knowledge is important.

In assessing the relative power of students who have formed a study group, we find
that the student who seems to possess better knowledge will have greater power.

Consequences of Power

The distribution of power can be assessed by examining the consequences of a

decision making process. Since power is used to influence decisions, those with the
greatest power should be the ones who obtain the most favorable decision outcomes.

Typically we assume that the most powerful people are the ones who can persuade
others.

Therefore, they would usually be on the winning side of a vote.

Sometimes, however, the outcome of a decision is obvious long before it is made, and
to avoid being on the losing side, individuals will jump on the bandwagon to become
part of the winning team.

Symbols

Examining how many symbols of power they possess can assess the power of
different individuals.

Symbols include such things as titles, office size and location, special parking
privileges, special eating facilities, automobiles, airplanes, and office furnishings.

Since the executive offices are typically on the top floor of a building, the location of
offices on other floors often reflects the relative power of the officeholders.

Reputation

Another way of assessing power in organizations is to ask members of the

organization who possess the greatest power or exerts the greatest influence.

This method measures the reputation of organizational members as perceived by

others and assumes that people are knowledgeable about power relationships and
willing to report what they know.

These assumptions are often incorrect, especially when power is effective because
then it is not perceived as an exercise of power.

Consequently, the potential activities of the most powerful individuals may be

understated or overlooked by both themselves and others.

Finally, the last way of assessing power is to determine which individuals and groups
are the most heavily represented on the committee and other significant administrative
posts.

As a group rule, individuals who are invited to participate in significant administrative

council acquire greater power for their departments, such as when accountants
participate in an executive committee meeting or when engineers participate in quality
circles.

A few years ago the word “power” was not worthy of discussion in the subject of
Organizational Behavior.

Not anymore. Today it has acquired respectability because of its significant impact on
the behavior of people in the organizations.
 Acquisition of Power
It is everybody’s knowledge that some people enjoy more power than others. They do
so by-

 Doing the right things.

 Cultivating the right people.

 Coalescing.

 Co-opting.

 Others.

Doing the Right Things

Although most employees faithfully perform their assigned role, methodical and
dependable role performance does not necessarily increase an individual’s power.

Some activities are considerably better than others for increasing personal power. The
power of individuals increases when their activities are extraordinary, highly visible,
and especially relevant to organizational problems.

Extraordinary Activities
Routine job performance does not contribute much to personal power even when the
performance is excellent.

To increase their power significantly, individuals need to perform unusual or non-

routine activities that commonly involve an element of risk.

Examples of extraordinary activities include negotiating a new contract, developing a

new program, or designing a new product.

Visible Activities
Extraordinary activities will not generate much power if no one knows about them.
Therefore, the extraordinary activities must be visible to others in the organization,
preferably without the individual having to “Blow his own trumpet”.

Individuals who are required to advertise’ their extraordinary activities do not gain as
much power as those whose activities are announced by top management or
influential people outside the organization.
Relevant Activities
Besides being extraordinary and visible, the activities need to be seen to be relevant to
the mission of the organization or the solution of important organizational problems.

Trivial activities do not produce the same degree of personal power as activities that
are central to the survival of the organization.

Cultivating the Right People

In addition to doing the right things, individuals can increase their power by
developing informal relationships with the right people. If the interpersonal
relationships are properly managed, virtually everyone can contribute to the
development of the individual’s power, including superiors, subordinates, and peers.

Superiors
Higher managers can significantly increase an individual’s power, as suggested by the
phrase “It’s not what you know but who you know that counts.”

Superiors who show a special interest and willingness to help promising subordinates
are referred to as mentors or sponsors. These individuals may be an immediate
supervisor or any higher-level officer.

They can be extremely helpful in increasing personal power by speaking favorably of

subordinates, recommending them for new assignments, and providing introductions
to other influential people.

Subordinates
Although it may seem unusual for subordinates to have the capacity to increase their
superior’s power, they may indeed play a very significant role by making their
superior look good or by endorsing their superior’s views and recommendations.

Professors who train brilliant doctoral students and managers who train outstanding
new leaders can exert greater influence not only because of their reputation as
outstanding trainers but also because of their continuing relationship with their former
subordinates.

Peers
An individual’s power can be enhanced or destroyed by favorable or unfavorable
relationships with peers. Individuals cannot succeed alone. They depend upon the
support and cooperation of their peers.

An antagonistic relationship with peers can destroy personal power and prevent
individuals from being effective within the organization.
 Coalescing

Another strategy used to acquire and enhance power Coalescing the process of
forming coalitions. Individuals Or groups frequently combine their resources to
pursue common goals and objectives.

The basic reason for joining together in such an alliance is an increased capacity to
influence, achieved through greater control of resources. A labor union, for example,
comprises many individuals seeking to promote the collective interests of workers.

Co-opting

Another method of increasing power is co-opting. Co-opting is accomplished by

absorbing people or groups whose support is needed into positions of limited
influence.

This tactic differs from coalescing in that it specifically seeks to eliminate threats and
opposition to an individual’s base of power.

Doing the right things, knowing the right people, coalescing and co-opting are not the
only strategies for acquiring or enhancing power, but they are representatives of the
methods commonly used and observed in organizational settings.

Other methods of power acquisition

There are some other strategies to gain power. These strategies can be .studied under
two heads;

1. positional power, and

2. personal power.

Positional Power can be Acquired by

 Increases one’s centrality and criticality in the organization.

 Increase the personal discretion and flexibility of one’s job.

 Build tasks that are difficult to evaluate.

 Increase the visibility of job performance.

 Increase the relevance of one’s tasks to the organization.

Strategies for Gaining Personal Power

Personal power depends on the characteristics of the manager as an individual and not
the organizational position he/she occupies. Naturally, personal power can be
strengthened by enhancing individual traits.

A manager can enhance his or her power through the expertise gained by possession
of special knowledge (gained by education, training ‘ and experience) and information
(gained by accessing to data or people)

compliance-gaining strategies :-

Compliance gaining (behavioral compliance gaining) is the process of getting

someone to do what you want them to do despite any disinclination on their part. As a
field of study, compliance gaining originated in the social sciences and has been
applied in marketing, website design, human resources management (HRM), public
relations (PR) and political campaigns, among many other areas.

The concept of compliance, in this context, is often confused with persuasion, which
can be thought of as one route to compliance gaining. Persuasion marketing, for
example, might attempt to convince the recipient of a message that a particular
product or brand is right for them. However, while persuasion seeks to change
people's beliefs and attitudes, compliance gaining is designed to elicit actual behaviors
from the target, such as making a purchase, flouting a security policy, promoting a
brand or voting for a particular politician. Compliance is also distinct from obedience,
which implies some authority or requirement, because the individual is free to respond
as desired or not.

Most people encounter -- and attempt -- compliance gaining on a daily basis at home,
at work and online. Strategies for achieving compliance include offering rewards,
threatening punishment, using flattery and convincing people that the target behavior
is the right or intelligent thing to do.

The efforts behind compliance gaining may be overt or covert, and the intention may
or may not be ethical. Online, particularly through social media, people are
bombarded with attempts to gain their compliance for a myriad of purposes. Efforts
often involve segmenting the audience for targeted communications and
exploiting social influence to increase the effectiveness of a campaign. Less ethical
attempts include social engineering, fake news and weaponized information.

Developing argumentative competence:-

 argumentative competence as "the set of knowledge, skills, attitudes and values which enables to prove the set
thesis, to present clear, reliable, ethical, correct arguments to guarantee the successful construction of the
information, its coding, decoding and interpretation" argumentative competence as the use of language in specific
communicative situations in which points of view, thoughts, beliefs, values, and actions are presented and justified
in order to persuade or convince the reader or listener in a reasonable way. Argumentative competence is a central
component of academic and social life. Developing argumentative competence is a requirement for democratic
participation and for advocating one's civil rights in society. This competence is a tool to take a stand, to assess
truth, to identify fallacies or weak arguments, to defend one's ideas and to engage in dialogue where one's views and
others' are interpreted and evaluated in order to provide rebuttals or counter arguments to opposing views.
Therefore, developing written argumentative competence implies an intellectual contact or dialogue between writers
and readers in which different perspectives are considered, examined, evaluated, and rebutted.
The Eleven Tactics of Influence:-
The effective leader needs as many influence tactics at her or his disposal as possible. The University of
Nebraska recently published eleven key influence tactics, listed from hard (direct, authoritative) to soft
(indirect, collaborative):         

1. Pressure   

Seeks influence through demands, threats or intimidation to convince others to comply with a request or to
support a proposal.

2. Assertiveness       

Seeks influence through includes repeatedly making requests, setting timelines for project completion or
expressing anger toward individuals who do not meet expectations.

3. Legitimating       

Seeks influence through persuading others that the request is something they should comply with given their
situation or position.  

4. Coalition  

Seeks influence through the aid of others to persuade them to do something or uses the support of others as an
argument for them to agree.            

5. Exchange  

Seeks influence through making explicit or implicit a promise that others will receive rewards or tangible
benefits if they comply with a request or reminds others of a favor that should be reciprocated.   

6. Upward Appeals
Seeks influence through the approval/acceptance of those in higher positions within the organization prior to
making a request of someone.   

7. Ingratiating         

Seeks influence through getting others in a good mood or to think favorably of them before asking them to do
something.           

8. Rational Persuasion      

Seeks influence through logical arguments and factual evidence to persuade others that a proposal or request is
viable and likely to result in task objectives.   

9. Personal Appeals            

Seeks influence through others’ compliance to their request by asking a “special favor for them,” or relying on
interpersonal relationships to influence their behavior.       

10. Inspirational Appeals  

Seeks influence through making an emotional request or proposal that arouses enthusiasm by appealing to
other’s values and ideals, or by increasing their confidence that they can succeed.   

11. Consultation      

Seeks influence through involving others’ participation in making a decision or planning how to implement a
proposed policy, strategy or change.        

While all eleven tactics will need to be draw upon depending on the situation at hand, the influence tactics
occurring later on the list above are more effective at influencing others long-term.

What is impression Management ?

Impression management is a process in which individuals try to influence the perceptions people have
about something, a person, or an event.

Impression management may be a conscious or subconscious process. If you are an impression

management professional, you attempt to influence the observations and opinions that consumers have of
your products.

Put simply; effective impression management boosts sales.

In most cases, people who manage impressions are trying to align other people’s perceptions with their
goals.

We use impression management a lot in business. However, we also use it in everyday life. We use it
with our friends, work colleagues. We also use it with our family members.

Impression management (IM), originated by Erving Goffman (1959), describes a central aspect of role

theory: how individual actors create, maintain, defend, and often enhance their social identities through
assumptions, settings, props, and scripts in a play metaphor (Dillard et al 2000,  Goffman 1959, and
Schlenker (1980).

Impression management as an emerging issue in organisation power-politics;

Impression management is a conscious or sub-conscious process in which people attempt to influence the
perceptions of other people about a person, object or event by regulating and controlling information in
social interaction.

Characteristics of a good negotiator

 open minded  staying detached

 charming  flexible
 well thought out  insightful
 articulated  understand the other side
 experienced  persuasive
 perseverance  knowing what you want
 patience
 assertiveness
Unit 4
Strategic Leadership
Strategic leadership refers to a manager’s potential to express a strategic vision for the organization, or a
part of 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. 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.

A few main traits / characteristics / features / qualities of effective strategic leaders that do lead to superior
performance are as follows:

Loyalty- Powerful and effective leaders demonstrate their loyalty to their vision by their words and actions.

Keeping them updated- Efficient and effective leaders keep themselves updated about what is happening
within their organization. They have various formal and informal sources of information in the organization.

Judicious use of power- Strategic leaders makes a very wise use of their power. They must play the power
game skillfully and try to develop consent for their ideas rather than forcing their ideas upon others. They must
push their ideas gradually.

Have wider perspective/outlook- Strategic leaders just don’t have skills in their narrow specialty but they have
a little knowledge about a lot of things.

Motivation- Strategic leaders must have a zeal for work that goes beyond money and power and also they
should have an inclination to achieve goals with energy and determination.

Compassion- Strategic leaders must understand the views and feelings of their subordinates, and make
decisions after considering them.

Self-control- Strategic leaders must have the potential to control distracting/disturbing moods and desires, i.e.,
they must think before acting.

Social skills- Strategic leaders must be friendly and social.

Self-awareness- Strategic leaders must have the potential to understand their own moods and emotions, as well
as their impact on others.

Readiness to delegate and authorize- Effective leaders are proficient at delegation. They are well aware of the
fact that delegation will avoid overloading of responsibilities on the leaders. They also recognize the fact that
authorizing the subordinates to make decisions will motivate them a lot.

Articulacy- Strong leaders are articulate enough to communicate the vision(vision of where the organization
should head) to the organizational members in terms that boost those members.
 Constancy/ Reliability- Strategic leaders constantly convey their vision until it becomes a component of
organizational culture.

To conclude, Strategic leaders can create vision, express vision, passionately possess vision and persistently drive it
to accomplishment.

strategic intent:-
In the field of management and organizational development, strategic intent is defined as a compelling
statement about where an organization is going that succinctly conveys a sense of what that organization wants
to achieve in the long term. Strategic intent answers the question: “What exactly are we trying to accomplish?”

 Strategic intent can provide a sense of direction, a particular point of view about the long-term market
or competitive position the organization hopes to develop and occupy.
 Strategic intent can provide a sense of discovery in that it holds out to the organization’s members the
promise of learning about other organizations that operate in the same market, adopting their best
practices and avoiding pitfalls.
 Strategic intent can provide a sense of destiny, a worthwhile goal around which energies can be
focused across the organization.

Developing strategic intent in an organization is a solution to this problem given the limitations of planning in
delivering performance outcomes. Strategic intent can be understood as a compelling, motivating statement of
how an organization will achieve its vision over the long-term. If vision defines what future success looks like
and what a company expects to become, strategic intent offers a broad guideline as to how it will get there.

Shaping organisational culture; Developing talented operational leadership:-

Shaping Organizational Culture

• Organizational culture includes an organization's expectations, experiences, philosophy,

as well as the values that guide member behavior, and is expressed in member self-image,
inner workings, interactions with the outside world, and future expectations.

•
It refers to the collective behavior of the people who make up an organization; this
includes their values, visions, norms, working language, systems, symbols, beliefs, and
habits.

• It affects the way people and groups interact with each other, with clients, and with
stakeholders.

• A strong culture is integral to long-term organizational sustainability and success, and

one of management’s primary responsibilities is to both define and communicate this
sense of shared culture.

Matching Existing Organisational:-

Matching Organization Structure  To Strategy

 • All of the basic organizational form have their strategy related strengths and weaknesses,
thus the best organizational arrangement is the one that best fits the firm's situation at the
moment that provide for coordination among the various organizational units.

• What is the relationship between strategy and organizational structure?

• The  relationship between organizational structure and becomes clearer when the
company’s strategy is clear.

• With a clear focus of what it wants to achieve, the   organization  will proceed to align
its  structure  in such a manner to best achieve this.

Leadership, Organisational culture with newly chosen strategies:-

Culture is, in essence, an organization’s operating environment. As such, it

influences how well an organization can meet challenges—and make changes.
Organizational culture includes the shared beliefs, norms and values within an organization. It sets the
foundation for strategy. For a strategy within an organization to develop and be implemented successfully, it
must fully align with the organizational culture. Thus, initiatives and goals must be established within an
organization to support and establish an organizational culture that embraces the organization’s strategy
over time. Organizations that remain flexible are more likely to embrace change and create an environment
that remains open to production and communication. This provides a model that welcomes cultural diversity
and helps clarify strategy implementation. Culture within an organization can serve many purposes,
including to unify members within an organization and help create a set of common norms or rules within an
organization that employees follow.
 Unit 5
1. Review of corporate social responsibility (CSR) concepts
Corporate Social Responsibility (CSR) as a concept dates back to 1953 when Howard R. Bowen
introduced this concept in his book titled “Social Responsibilities of the Businessman”. He is
known as the father of CSR. CSR is an universally accepted and promoted by business
andgovernment . CSR concept is now a globalized concept which is gaining prominence in the
developing countries as well .The idea that business enterprises have some social
responsibilities beyond just making profit for its shareholders has been around for centuries.
The Concept of CSR was present from the start of the first enterprise. The evidence of the
business concern to the society can be traced back to 1930s when there were examples of
few businessmen getting involved in social responsibility . However the CSR gained its
importance in the 1960s. It is largely a product of the past half century . Bowen posed the
question on what responsibilities to the society the businesspeople may reasonably be expected
to assume?.This question has been driving the field of corporate social responsibility (CSR) for
over half a century. It gave a foundation from where the business executives and
academicians could consider CSR as part of strategic planning and managerial decision-making.

In the 1960s the academicians and the business leaders had a cautious approach to CSR after
a warning from Levitt in 1958 regarding the dangers of CSR. However the CSR
literature expanded significantly during the 1960s, and it mainly focused on the question of what
social responsibility actually meant and its importance to business and society . Keith Davis one
of the noted contributor to the CSR literature concluded that the first social responsibility
of any businessmen is to find workable solutions regarding the nature and extent of their own
social responsibilities. He predicted that the next fifty years will bring major social change.
However he emphasised that the business can successfully adapt to the social re-evaluation by
developing flexible responses to the needs of society otherwise the business will use up its
capital in human and spiritual values, which will lead them to social bankruptcy . In the
1960s social responsibility was primarily driven by external, socially conscious motivations, and
businesses were not expecting anything in return . However as per Friedman social
responsibility is a fundamentally subversive doctrine in a free society. He argued that in the free
society there is one and only one social responsibility of business and that is to use its
resources and engage in activities designed to increase its profits so long as it stays within the
rules of the game whereby it engages in open and free competition without deception or fraud.

Corporate social responsibility (CSR) is a self-regulating business model that helps a company
be socially accountable—to itself, its stakeholders, and the public. By practicing corporate social
responsibility, also called corporate citizenship, companies can be conscious of the kind of
impact they are having on all aspects of society, including economic, social, and environmental.
To engage in CSR means that, in the ordinary course of business, a company is operating in
ways that enhance society and the environment, instead of contributing negatively to them.

 Corporate social responsibility is important to both consumers and companies.

 Starbucks is a leader in creating corporate social responsibility programs in many aspects
of its business. 
 Corporate responsibility programs are a great way to raise morale in the workplace. 
An overview of stakeholder approach to CSR

• Stakeholder approach indicates that a business is not only responsible to its owners, but
also has obligations to various stakeholders, such as employees, customers, business
partners, government and non-governmental organizations.
• The social approach is a broader view on CSR.
• Managers can adopt a stakeholder influenced CSR strategy to generate strong corporate
reputation to improve business performance.
• It is important to ensure that the interests of “employees” and “public” stakeholders are
addressed within organizational strategy.

Stakeholder theory has gained currency in the business and society literature in recent years in
light of its practicality from the perspective of managers and scholars. In accounting for the
recent ascendancy of stakeholder theory, this article presents an overview of two traditional
conceptualizations of corporate social responsibility.
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
KEY WORDS: corporate social responsibility (CSR),
stakeholder theory, Lebanese and Syrian contex
ways from the narrow economic perspective of
increasing shareholder wealth (Friedman, 1962), to
economic, legal, ethical and discretionary strands of
responsibility (Carroll, 1979) to good corporate
citizenship (Hemphill, 2004). These variations
stem in part from differing fundamental assumptions
about what CSR entails, varying from concep-
tions of minimal legal and economic obligations
and accountability to stockholders to broader
responsibilities to the wider social system in which a
corporation is embedded
ways from the narrow economic perspective of
increasing shareholder wealth (Friedman, 1962), to
economic, legal, ethical and discretionary strands of
responsibility (Carroll, 1979) to good corporate
citizenship (Hemphill, 2004). These variations
stem in part from differing fundamental assumptions
about what CSR entails, varying from concep-
tions of minimal legal and economic obligations
and accountability to stockholders to broader
responsibilities to the wider social system in which a
corporation is embedded
ways from the narrow economic perspective of
increasing shareholder wealth (Friedman, 1962), to
economic, legal, ethical and discretionary strands of
responsibility (Carroll, 1979) to good corporate
citizenship (Hemphill, 2004). These variations
stem in part from differing fundamental assumptions
about what CSR entails, varying from concep-
tions of minimal legal and economic obligations
and accountability to stockholders to broader
responsibilities to the wider social system in which a
corporation is embedded
ways from the narrow economic perspective of
increasing shareholder wealth (Friedman, 1962), to
economic, legal, ethical and discretionary strands of
responsibility (Carroll, 1979) to good corporate
citizenship (Hemphill, 2004). These variations
stem in part from differing fundamental assumptions
about what CSR entails, varying from concep-
tions of minimal legal and economic obligations
and accountability to stockholders to broader
responsibilities to the wider social system in which a
corporation is embedded
ways from the narrow economic perspective of
increasing shareholder wealth (Friedman, 1962), to
economic, legal, ethical and discretionary strands of
responsibility (Carroll, 1979) to good corporate
citizenship (Hemphill, 2004). These variations
stem in part from differing fundamental assumptions
about what CSR entails, varying from concep-
tions of minimal legal and economic obligations
and accountability to stockholders to broader
responsibilities to the wider social system in which a
corporation is embedded

The stakeholders are a key factor for the success of the CSR practices. Without their
engagement, knowledge, skills, talent, loyalty, the organization could not achieve its objectives.
A characteristic of CSR is the idea that the business is accountable to the various stakeholders
who can be identified and have a claim, either legally mentioned or morally expected, on the
business activities that affect them [19]. Nowadays, more and more authors put the stakeholder
approach in the core of the CSR theories [20]. Homes and Watts (2000) see the engagement of
the stakeholders as “the essence of CSR” . More recently, CSR has become recognized as a
growing area of strategic value creation for companies. Yet stakeholder engagement is often seen
as secondary, even non-essential, to the CSR agenda. The relationship between CSR and
business is traditionally examined through related concepts of Corporate Social Performance.
The generally accepted definition of CSP itself suggests that top managers, i.e., those who make
strategic choices and decisions for organizational development and prosperity, play “a critical
role in the articulation of the organization’s posture vis-a-vis its stakeholders and constituents”
[30]. Thomas and Simerly found that “top managers are important internal determinants of a
firm’s CSP, and top management teams and CEOs are both important to social performance
outcomes”. They also suggested that a top manager’s background could play a significant role in
his or her sensitivity towards stakeholders’ claims and any CSR issues the organization might be
confronted with [30]. In other words, organizations are ultimately built by people, who are
citizens themselves entitled to rights, duties and responsibilities [31]. If the extended enterprise is
confronted with so many stakeholders towards whom it has so many responsibilities such
boundlessness could render CSR meaningless. It may well be that the problem is not in the
pertinence of CSR, but rather on the very personal, individual values and responsibilities of the
people that make the social organizations [31]. CSR cannot exist if individuals do not possess
enough maturity and competence to act responsibly. It is up to companies to train and for society
to socialize the individuals towards the development of such necessary competencies .

The stakeholder approach outlines a new capability for organizations to develop their CSR
policy. Through managing the stakeholders and their engagement in the CSR managers could
more easily develop, integrate and realize CSR policy with bigger influence. Stakeholder
engagement is an opportunity for managers to carefully listen to the issues. raised in the
engagement, fully understand the viewpoints presented around the issues and then engage in
dialogues and action. The CSR stakeholder engagement can vary, but its main purpose is to
provide a framework for a dialogue in which devout stakeholders bring concerns forward to the
organization with the plan of discussing coming to agreement in the form of a policy designed to
address a particular issue.

 CSR and corporate citizenship (CC);

Corporate Social Responsibility has gained its attention and popularity since the last decade.
There are many CSR debates arise which shaped by trends and fundamental changes of the
political, social, and economic spheres of life. As the basic economic unit in society, a business
is responsible to provide goods or services and make profit to create wealth. At the same time,
rules and regulations are set for the business to operate within certain limits. Meeting these rules
constitutes the legal responsibilities of the business. Besides the ethical norms embodied in the
first two categories, there are additional ethical actions which are not included in the law but
expected by society. The importance of ethical responsibilities has been well noticed, although it
is always an issue to judge what is and is not ethical. It is reasonable to say that the ethical
responsibilities are the expectations above legal requirements that society has of business.
Discretionary/philanthropic responsibilities are even vaguer than ethical responsibilities. Society
leaves these to the judgment and choice of business. To fulfill these responsibilities, the social
role of business is voluntary. The decision to assume them is not required by law and is also
above and beyond the sense of ethics. It is only led by the business‘s desire to be involved in this
role and contribute to society.

Corporate Citizenship is a recognition that business, corporation or business-like

organisation, has social, cultural and environmental responsibilities to the community. Corporate
citizenship is the term used to describe the contribution a business or organization makes to the local
community or society as a whole. These contributions include not only the company’s core business
activities, but also its investments in the local community. An organization’s long-term success depends
on having favorable corporate citizenship. For this to happen, the company must successfully engage with
its employees, shareholders, business partners, customers, the government, and the rest of the
community. These relationships are vital for a business that wants to have successful financing and social
standings within the community. Corporate citizenship is often referred to as corporate social
responsibility or corporate governance. Corporate citizenship involves the social responsibility of
businesses and the extent to which they meet legal, ethical, and economic responsibilities, as established
by shareholders. Corporate citizenship is growing increasingly important as both individual and
institutional investors begin to seek out companies that have socially responsible orientations such as
their environmental, social, and governance (ESG) practices. Corporate citizenship refers to a
company’s responsibilities toward society. The goal is to produce higher standards of living and quality
of life for the communities that surround them and still maintain profitability for stakeholders.
The demand for socially responsible corporations continues to grow, encouraging investors, consumers,
and employees to use their individual power to negatively affect companies that do not share their
values.All businesses have basic ethical and legal responsibilities; however, the most successful
businesses establish a strong foundation of corporate citizenship, showing a commitment to ethical
behavior by creating a balance between the needs of shareholders and the needs of the community and
environment in the surrounding area. These practices help bring in consumers and establish brand and
company loyalty.

 Corporate citizenship refers to a company’s responsibilities toward society.

 Corporate citizenship is growing increasingly important as both individual and
institutional investors begin to seek out companies that have socially responsible
orientations such as their environmental, social, and governance (ESG) practices.
 Companies go through increasing stages during the process of developing corporate
citizenship.

Concept of corporate citizenship and corporate social performance

Corporate citizenship refers to a company's responsibilities toward society. The goal is to

produce higher standards of living and quality of life for the communities that surround them and
still maintain profitability for stakeholders. Corporate citizenship is how a company exercises its
rights, obligations, privileges, and overall corporate responsibility within our local and global
environments. The measurement and return on investment (ROI) of corporate responsibility and
corporate citizenship is defined by how well companies responsibly manage not only their
financial performance but also their environmental and social impact. Whether we call it CSR,
Corporate Responsibility, or ESG, great corporate citizenship goes beyond a focus on addressing
surface-level sustainability efforts or corporate philanthropy. Today’s leading responsible
corporations draw on the collective impact of a variety of initiatives that address an array of
trends and emerging issues.

Corporate social performance is a construct that encompasses principles for and processes by
which business organizations interact with their stakeholders, as well as the outcomes and
impacts of these interactions. The term constitutes a broad view of corporate responsibility,
instead of a narrow view focused on owner wealth.Corporate social performance (CSP) refers to
the principles, practices, and outcomes of businesses’ relationships with people, organizations,
institutions, communities, societies, and the earth, in terms of the deliberate actions of businesses
toward these stakeholders as well as the unintended externalities of business activity. The
development of the CSP concept, beginning in the 1950s and 1960s, is important for
understanding how CSP is related to other core topics and concepts in business and
society/business ethics. As the CSP concept was refined, an earlier term, corporate social
responsibility (CSR), was incorporated as one element of CSP, in particular, the ethical and/or
structural principles of social responsibility, or business engagement with others. Research
attention was also eventually given to business processes for implementing (or avoiding) social
responsibility and responding to stakeholder issues and then to the impacts and outcomes of
CSP-related behaviors. Thus, over time, researchers included the “why (principles), what and
how (processes), and what happened (outcomes)” of CSP. Of necessity, any bibliography on
corporate social performance will be integrated with works on related subjects, including
corporate social responsibility and responsiveness, stakeholder theory, business ethics, corporate
political action, issues management, and sustainability. The reader will find some references to
these topics herein, although detailed bibliographic information on them is beyond the scope of
this article. The CSP sections are organized in two ways: first is a topical organization, including
conceptual development, operationalization, stakeholder relations (employees, suppliers, others),
CSP and financial performance, corporate social reporting, and CSP approaches with general
audience appeal (plus sections on general references, journals, and textbooks). Second, within
the topics, readers will see a chronological order to the research cited. Because CSP is a
relatively new area of study, this chronology-within-topic approach helps the reader to see how
the field has developed from rudimentary “shoulds” to sophisticated conceptual and empirical
research.  the idea of corporate social performance, which is the stakeholders' assessment of
the CSR and corporate citizenship over time in comparison to competition. How will
stakeholders assess a company through the model? They will evaluate and analyze a company
through the three variables. We will use Microsoft as an example since they epitomize a socially
responsible company.

Shift from CSR to corporate shared value

Every business corporation has

multifaceted involvements
with the society it operates in, this
involvement with people,
groups, other organizations,
government and NGO bodies are
sometimes envisioned and
anticipated, while other times
inadvertent and not anticipated. These
people and groups are
interested in the decisions, actions,
practices, profitability and
economic success of the business
corporation. Amongst them
are customers, creditors, owners,
employees and the local
community. Their support can be
critical to a business
organization’s success or failure [12].
The modern business;
small or big is part of the global
business environment; social
issues, events, and pressures from
around the world will
influence it. It is thus becomes
pertinent to examine how
business corporations can combine
economic and social
commitments, with minutest conflict
and maximum benefits
for all [12]. CSR forms a platform
through which
organizations are able to act
economically, legally, morally,
socially and environmentally
responsibly to its various
stakeholders [19]-[21]. More recently,
due to increased
competition, and the need to remain
profitable, businesses
have slowly moved from generic
CSR that provided little or
no direct economic return to creating
shared value that creates
a balance between economic and
societal gains. This section
provides a conceptual understanding
of CSR and creating
shared value
Every business corporation has
multifaceted involvements
with the society it operates in, this
involvement with people,
groups, other organizations,
government and NGO bodies are
sometimes envisioned and
anticipated, while other times
inadvertent and not anticipated. These
people and groups are
interested in the decisions, actions,
practices, profitability and
economic success of the business
corporation. Amongst them
are customers, creditors, owners,
employees and the local
community. Their support can be
critical to a business
organization’s success or failure [12].
The modern business;
small or big is part of the global
business environment; social
issues, events, and pressures from
around the world will
influence it. It is thus becomes
pertinent to examine how
business corporations can combine
economic and social
commitments, with minutest conflict
and maximum benefits
for all [12]. CSR forms a platform
through which
organizations are able to act
economically, legally, morally,
socially and environmentally
responsibly to its various
stakeholders [19]-[21]. More recently,
due to increased
competition, and the need to remain
profitable, businesses
have slowly moved from generic
CSR that provided little or
no direct economic return to creating
shared value that creates
a balance between economic and
societal gains. This section
provides a conceptual understanding
of CSR and creating
shared value
Every business corporation has
multifaceted involvements
with the society it operates in, this
involvement with people,
groups, other organizations,
government and NGO bodies are
sometimes envisioned and
anticipated, while other times
inadvertent and not anticipated. These
people and groups are
interested in the decisions, actions,
practices, profitability and
economic success of the business
corporation. Amongst them
are customers, creditors, owners,
employees and the local
community. Their support can be
critical to a business
organization’s success or failure [12].
The modern business;
small or big is part of the global
business environment; social
issues, events, and pressures from
around the world will
influence it. It is thus becomes
pertinent to examine how
business corporations can combine
economic and social
commitments, with minutest conflict
and maximum benefits
for all [12]. CSR forms a platform
through which
organizations are able to act
economically, legally, morally,
socially and environmentally
responsibly to its various
stakeholders [19]-[21]. More recently,
due to increased
competition, and the need to remain
profitable, businesses
have slowly moved from generic
CSR that provided little or
no direct economic return to creating
shared value that creates
a balance between economic and
societal gains. This section
provides a conceptual understanding
of CSR and creating
shared value
Corporate Shared Value (or Shared Value) is a new generation business thinking which
enhances the competitive position of the company while at the same time advances the
society in which it operates.By taking this approach, companies could realign their success with social
progress, they said. It enables them to see social issues as businesses opportunities and profit from them, while
also making positive social changes. Profit and doing good don’t have to be separate according to the corporate
shared value (CSV) argument.This concept is different than corporate social responsibility (CSR) or
philanthropy. These efforts focused on giving back or minimizing the harm that a company does. CSV isn’t
meant to replace CSR. Instead, it builds on the idea by making positive actions an integral part of a business’
everyday operations. It adds value for both society and investors.

They claim a slight development was Porter and Kramer's 2011 attempt to broaden the concept of shared value
beyond the arena of corporate social responsibility with a greater focus on the nature of capitalism and
markets, noting dislocations with current capitalism, emphasising the inherent social nature of markets, and
suggesting that by adopting shared value principles business and society will be reconnected creating new
innovation and socially imbued capitalism.[14]
Whilst it can be argued that capitalism would certainly change if businesses on mass re-orientated their core
frameworks to focus on shared value there is little analysis on how this would occur. The authors themselves
recognise this.[14]
Porter and Kramer identify GE, Google, IBM and Unilever as having adopted shared value principles but note
that, “our recognition of the transformative power of shared value is still in its genesis.” and argue that
addressing social constraints does not necessarily raise internal costs for firms. Through innovation in new
technologies, operating methods, and management approaches a firm can improve society while increasing
their productivity and profitability.[14]
• Creating shared value is the practice of creating economic value in a way that also creates value for
society by addressing its needs and challenges.
• There are 3 ways to create shared value: by re-conceiving products and markets, by redefining
productivity in the value chain, and by enabling local cluster development.
• Three Levels of CSV.
• There are three distinct ways to do this: by reconceiving products and markets, redefining
productivity in the value chain, and improving the local and regional business environment.
• A social audit is a way of measuring, understanding, reporting and ultimately improving an
organization's social and ethical performance.
• A social audit helps to narrow gaps between vision/goal and reality, between efficiency and
effectiveness. ... Social auditing creates an impact upon governance.

To create shared value companies should:-

 Reconceive products and markets to provide appropriate services and meet unmet needs. For example,
the provision of low-cost cell phones developed new market opportunities as well as new services for the
poor.
 Redefine productivity in the value chain to mitigate risks and boost productivity. For example, in
reducing excess packing in product distribution reducing cost and environmental degradation.
 Enable local cluster development by improving the external framework that supports the company's
operations, for example by developing the skills of suppliers.

An overview of NBI’s Business Code of Conduct, 2013.

We the members of the business community, with esteemed honour to Nepal’s nationality,
national unity and sovereignty; desirous of contributing to the national campaign of creating a
prosperous, well-managed and peaceful nation through sustainable socio-economic development;
as a part of our continuous effort to improve the living standard of Nepali citizens; issue with
commitment this Business Code of Conduct Concepts prepared under the coordination of
National Business Initiative (NBI).
1. Believing in a single un-fractured market throughout the country, we uphold the principle that
all citizens should have the freedom, within the limits of the law, to conduct his/her business
freely in any part of the country.
2. We believe in the overall development of the country through democratic, peaceful and
healthy political practice.
3. We believe that any form of destructive conflict has a detrimental impact on the country and
the business. We oppose all forms of destructive strikes, bandhs and violence. Therefore, we
proactively seek to help resolve the conflict and promote peace.
4. We will continue to extend our active participation and support, through our institutional
mechanisms, to the state for formulating new policies and laws or amending existing laws,
without any mal-interest.
5. We believe that non-transparent and corrupt malpractices undertaken for momentary gains
harm the overall development and credibility of the industries and businesses in the long run. We
will identify ways to control such activities and strive to implement them.
6. We will continue our efforts to solve common problems that arise while doing business
through consensus and solidarity.
1. Consumer Rights
1.1 While doing our business, we consider the interest of the state and the people as supreme.
1.2. Mindful of the concept of “the sovereignty of consumers” we are committed to the universal
rights of the consumers.
1.3. We believe that our products and services should address the security and satisfaction of the
consumers along with accurate information.
2. Competitive Market
2.1 We remain committed to and will advocate for open and market-oriented economy.
2.2 We do not support monopoly and unhealthy business practices.
2.3 We believe in healthy fair competition and will support implementation of related laws.
2.4 As the state has adopted open and liberal economic policy and has also become a member of
the World Trade Organisation, we believe that the government should create a favorable
enabling environment for business and we will support this cause.
3. Taxation
3.1 We express our commitment to timely payment of taxes as per the law of the state. We
believe that the taxation system must be business-friendly and the representation of private sector
should be ensured in formulating such policies and laws.
3.2 Fairness, transparency, and corporate responsibility are the bases of our work. We are
completely aware of our responsibility to achieve the highest degree of integrity, credibility and
honesty. We will make our accounts transparent and we expect support from all other sectors to
do this.
4. Labour Management
4.1 We respect the legitimate demands of workers/employees, but will not support acts that harm
our businesses and the nation.
4.2 We will adopt transparency in procuring materials and recruiting workers/employees
required for the business and will procure goods on the basis of quality and recruit individuals on
the basis of the individual’s qualification and capacity.
4.3 We believe that all labor disputes should be settled through negotiation and when required
through tripartite dialogue between government, labor representatives and business people and
we expect positive support from other stakeholders.
5. Environment Protection
5.1 We will strive for sustainable business development by reducing and managing the adverse
impacts that our business activities leave or could leave in the environment.
5.2 We strive for promotion and development of environment-friendly business.
5.3 Remaining alert about our social responsibilities, we will strive to fulfill our responsibilities
as per the principles of the United Nations and International Business Organisations.
6. Corruption Control
6.1 We respect fundamental human rights and personal freedom of all Nepalese and we believe
that the right to legally earn, possess and use personal property should be protected.
6.2 Our business activities will neither support nor oppose any political parties or groups
discriminately. But if any act is likely to have an adverse impact on legitimate business, we will
protest collectively. We will not give any kind of donation, presents or services/facilities to any
political person or party with an intention of gain in the future.
6.3 We express commitment to follow the law of the land. But we oppose actions and procedures
that leave adverse impacts on business promotion and create a chance for corruption, such as
incomplete laws, long administrative procedures, impractical implementation and unnecessary
discretionary power and will collectively support reforms in these areas.
6.4 We uphold the principle that we must not bribe, give gifts, donations, presents directly or
indirectly for our business and financial advantage. If any situation is created where we are
forced to conduct such acts, we will lodge complaints in concerned agencies. We will not
provide any kind of presents, gifts or hospitality other than the ones accepted by our culture and
social traditions.
6.5 We will ensure transparency when giving donations and support to any philanthropic
organizations or cause, institutions or individuals affected by disaster, helpless individuals or
families and the communities.
We are committed to the underlying principles of this Business Code of Conduct and will
develop it to suit sectors and companies. We realize that implementation is of crucial importance.
To achieve this we expect cooperation and seek understanding from all sectors in Nepal.

UN Global Compact :

The United Nations Global Compact is a non-binding United Nations pact to encourage

businesses worldwide to adopt sustainable and socially responsible policies, and to report on
their implementation. The UN Global Compact is a principle-based framework for businesses,
stating ten principles in the areas of human rights, labor, the environment and anti-corruption.
Under the Global Compact, companies are brought together with UN agencies, labor groups and
civil society. Cities can join the Global Compact through the Cities Programme. The UN Global
Compact is the world's largest corporate sustainability (a.k.a. corporate social responsibility)
initiative with 13000 corporate participants and other stakeholders over 170 countries [2] with two
objectives: "Mainstream the ten principles in business activities around the world" and "Catalyse
actions in support of broader UN goals, such as the Millennium Development Goals (MDGs)
and Sustainable Development Goals (SDGs)".[3] Moving forward, the UN Global Compact and
its signatories are deeply invested and enthusiastic about supporting work towards the SDGs.

The United Nations Global Compact is a strategic initiative that supports global companies that
are committed to responsible business practices in the areas of human rights, labor, the
environment, and corruption. This UN-led initiative promotes activities that contribute
to sustainable development goals to create a better world.

 The United Nations Global Compact is an initiative that global corporations can sign on
to committing to responsible business practices in the areas of human rights, labor, the
environment, and corruption.
 The UN Global Compact has 10 operating principles outlining these values.
 For example, a corporation that is part of the UN Global Compact could commit to
providing free Wi-Fi access in remote areas of the world.
The United Nations Global Compact’s 10 Principles for Businesses
The 10 principles for businesses, as stated on the UN Global Compact’s website, are the
following:

 Principle 1: Support and respect the protection of internationally proclaimed human

rights.
 Principle 2: Ensure that business practices are not complicit in human rights abuses.
 Principle 3: Uphold the freedom of association and the effective recognition of the right
to collective bargaining.
 Principle 4: Eliminate all forms of forced and compulsory labor.
 Principle 5: Abolish child labor.
  Principle 6: Eliminate discrimination in employment and occupation.
 Principle 7: Adopt a precautionary approach to environmental challenges.
 Principle 8: Conduct environmentally responsible activities.
 Principle 9: Encourage the development and diffusion of environmentally friendly
technologies.
 Principle 10: Fight corruption in all its forms including extortion and bribery.

Companies that join the compact are expected to integrate these principles into their corporate
strategies, culture, and day-to-day operations. Companies are also expected to advocate the
principles publicly and communicate with stakeholders on progress toward meeting the
principles. Any company that commits to upholding the principles may join the compact, which
is not legally binding and is purely voluntary. 

Concept of social audit; approaches and models of social audit :

Social Audit :

A social audit is a formal review of a company's endeavors, procedures, and code of conduct
regarding social responsibility and the company's impact on society. A social audit is an
assessment of how well the company is achieving its goals or benchmarks for social
responsibility.  A social audit is an internal examination of how a particular business is affecting
society. The audit helps companies to determine if they're meeting their objectives, which may
include measurable goals and benchmarks. A social audit serves as a way for a business to see if
the actions being taken are being positively or negatively received and relates that information to
the company’s overall public image.

In the era of corporate social responsibility, corporations are often expected to deliver value to
consumers and shareholders as well as meet environmental and social standards. Social audits
can help companies create, improve, and maintain a positive public relations image. For many
companies, a good public perception helps foster a positive image of the company and ultimately
reduce negative impacts on earnings from bad press.

 A social audit is a formal review of a company's endeavors, procedures, and code of

conduct regarding social responsibility and the company's impact on society. 
 A social audit is an assessment of how well the company is achieving its goals or
benchmarks for social responsibility.
 Ideally, companies aim to strike a balance between profitability and social responsibility.

approaches and models of social audit

1. The inventory approach, under which a list of all the company’s social activities is
prepared.
2. The cost or outlay approach in which the amount spent on each activity is disclosed.
3. The programme management approach, in which in addition to the above approaches,
a statement is made as to whether or not the company met its objectives for each activity.
4. The cost-benefit approach, under which the benefits of each expenditure, i.e., the real
worth, is indicated.
 The least informative of these approaches is the inventory approach, but the current
practice adopted by most firms is to use this approach. The most informative approach is
the cost-benefit approach, but the benefits achieved cannot be measured accurately. Some
companies also use the two other approaches. But, a good approach would be to attempt a
social audit report based on cost or outlay approach.

How to measure the results of social audit?

The results of social audit may be measured by looking into the following issues:

 Social audit looks for the overall approach of the company in its day-to-day conduct of
business? Has it been merely actuated by the motive of maximizing its profit or it has also
kept in view the aspect of service to society?
 Social audit looks for the company’s role in harnessing the natural resources at its
command with due care to ensure that the interest of both present and future generations
are safeguarded. For example, a coal mine can be worked in a manner that the owners or
the lease-holders derive the maximum profits in a short span but in the process make the
mine unworkable for future.
 Whether the organization is helping in advancing efficiency and productivity in society in
general?
 Whether the company is planning its affairs in such a manner that it is able to provide
dignity of labor, eradicate unemployment and employ persons according to their abilities
and aptitudes.
 Social audit takes due care and sees whether the organization, in the matter of
recruitment, promotion and diversification, is following a policy of discrimination on
grounds of race, religion, political views, social status, sex etc. Has it been able to, by its
policies, counteract such discrimination by others?
 Are the company’s policies encouraging talents in the field of its activity or in ancillary
and related fields of work?
 Social gives importance to working conditions and sees whether they are safe, healthy,
and conducive to the development of health and personality of its employees?
 Whether the organization is motivated by a desire for the well-being of its employees?
Has it been taking steps by way of providing insurance, old-age pensions and other
retirement and consequential benefits’?
 Whether the undertaking is developing an urge amongst its employees to do research and
development work and encourage them for new inventions and devices?
 Whether the organization is respecting the rights of labor to organize and have collective
bargaining?
 What is the policy of the corporation in the matter of prices, wages and profits and is it
progressive in its approach?
 Whether the corporation is honest in its dealings with persons who come in contact with
it and does not resort to such practices as adulteration, cheating and producing substandard
goods?
 Social audit also looks for whether the company is taking due care to avoid pollution?
 Whether it is taking due care of consumers and does not indulge in various monopolistic
restrictive and unfair trade practices?
 Whether it is catering to consumers’ satisfaction and is paying due attention to
consumers’ grievances?
 Whether it is taking due care and precaution in the marketing of goods which are
hazardous to health or life.
  Whether it is taking precaution not to indulge in fraudulent, deceitful and grossly
misleading information in advertising and in other trade activities.
 Social audit checks whether the public finances obtained from banks and other financial
institutions are being properly utilized.
 That the auditors should warn the government and the shareholders about the true state of
affairs of companies.
 That the auditors should raise warning signals of any impending sickness in the industry.

Social auditing is a process for evaluating, reporting on, and improving an organization’s
performance and behavior, and for measuring its effects on society. The social auditing can be
used to produce a measure of the social responsibility of an organization. It takes into account
any internal code of conduct as well as the views of all stakeholders and draws on best practice
factors of total quality management and human resource development. Like internal auditing,
social auditing requires an organization to identify what it is seeking to achieve, who the
stakeholders are, and how it wants to measure performance. Social auditing provides an
assessment of the impact of an organization’s nonfinancial objectives through systematically
and regularly monitoring its performance and the views of its stakeholders.

Role of leadership in making corporate entities socially responsible

Leaders are not necessary managers although the study of

leadership assumed relationship between formally appointed leaders

and employees. Some authors defined leadership as a process of

influence (Jackson, 2005; Barker 2001). According to Waldman and

Siegel (2008) empirical studies of CSR have largely ignored the place

of the corporate leader in implementing CSR initiatives. Although top

managers are obviously in the best position to influence these types

of strategies and project, researches previ o u s l y f a i l e d t o e x a m i n e t h e
effect of leaders value, ethics and style in regards to CSR. Waldman ’s
argument implies that the most appropriate leadership style for
organizations implementing CSR strategies is that which strategically
driven and which does not require maintaining an integrate to
personal values. Siegel on the other hand, argues that leader integrity
to personal morality can yield positive outcomes for businesses and
may actually be the driver for CSR strategies in organization
(Waldman and Siegel, 2008). De Hoogh and De Hartfog (2008) found
that leaders, who demonstrated a sense of right versus, wrong, duty,
concern of others, concern for consequences and also had a tendency
to judge own behavior, were seen as ethical leaders. A sense of duty
was found to link most strongly with the perception of ethical
leadership. Leaders who value the breadth of their organization’s
stakeholders appear to be more successful in their leadership
positions, according to financial and social success achieved by
organization. In investigation conducted by Sully de Luque et al
(2006), about the most important values of decision making in 500
D. Šarčević: LEADERSHIP FOR CORPORATE SOCIAL RESPONSIBILITY... 254

CEO’s in 17 countries. The results indicate that the leaders with

strong economic values were viewed as authorities and faile d to be
visionary. De Hoogh and De Hartog (2008) found that “morality and
fairness“ and role clarification both positively correlated with
optimism about the future and perceived top level management
effectiveness. Third type of leaders were defined by Boe rner et al.
(2007) as leaders who are not necessary ethical or socially
responsible, but such leaders are trusted. In particular,
transformational leadership has strong link to innovation (Shin and
Zhou, 2003). As it was said previously authentic leadership, ethical
leadership and transformational leadership have each been indirectly
or directly linked to corporate sustainability and CSR. Ethical leaders
display behaviors that indicate they seek to do the right thing
(Trevino et al, 2000). Authentic and ethical leadership share an
emphasis on honesty, openness and integrity as well as desire to do
what is right. Transformational leaders are charismatic: they inspire,
stimulate intellectually, and consider the individual and influence
through idealized visions. Wlummbwa et al (2008) also argue that
transformational leaders aim to develop followers into leaders.
Another and strongly contrasting style is autocratic leadership,
perhaps the first leadership style to be linked to CSR. Thomas Hobbes,
in his book, Leviatan(1651, 1985) argued this form of influence to be
the only way to control selfishness in the commercial world. This
style is characterized by coercion and a distinct lack of democratic
process in decision making (Van Vugt et al, 2004). Researchers ha ve
proposed that the new key responsibility of leadership is sensmaking
of the external environment as leaders must help the organization
stay aware of and adapt to rapid changes in its industry and new
stakeholders demands (Crossan and Hulland, 2002; Vera and Crossan,
2004).
Mostovicz et al, (2009) start their opinion from the premise
that there are three leadership approaches to CSR:
- Micro view (license for companies to operate and ability to
create financial wealth depends on their acceptability in the eyes of
society),
- Macro view (the organization have a moral obligation
toward society and its goals range from economic to social and
environmental ones),

ROLES OF THE LEADER

Make sure you fulfill the following critical roles of a leader to drive the success of your practice.

Provide a Vision

Providing a vision for the entire healthcare team is the single most important role of the practice
owner.  Employees cannot be expected to participate in a common effort if they don’t know the
goals of the practice.  When team members know the vision and goals of the practice, they are
more focused and understand how their individual role helps to drive the success of the business.

Establish Effective Organizational Structure and Communication Protocols

Set up a clearly defined organizational structure which includes an organizational chart outlining
the chain of command and protocols for effective communication.  Members of the healthcare
team need to understand who they report to when they have questions or concerns.  To facilitate
effective communication and efficiency, develop communication protocols.  Many practices find
it helpful to use email, hospital newsletters, and memos to augment their one-on-one
communication and staff meeting interactions.  The type of communication method utilized
should be appropriate for the content of the message.  Memos are fine to convey announcements
and information on minor issues.  Face-to-face meetings are necessary to discuss important
issues or convey information that is sensitive or may result in questions.

Be an Effective Role Model

Demonstrate the behavior desired from the rest of the healthcare team.  Practice owners that
display outbursts of anger, make snap decisions with no regard to the potential outcome for the
staff, demonstrate uncaring attitudes, show favoritism for some employees, withhold information
from the staff, procrastinate on important decisions, tolerate lack of accountability, demonstrate
inconsistencies in client service or fail to listen to their employees will not be as respected by the
team and likely will not be as successful in achieving their business goals. 

Inspire and Motivate

The definition of leadership is to “inspire, influence and guide others to participate in a common
effort.”  Good leaders don’t just bark orders or hand out directives with no explanation.  Instead
they use effective communication and motivation techniques to facilitate action by their teams. 
Leaders that inspire and motivate their teams solicit input from employees, keep team members
informed, give timely and specific feedback regarding job performance, ensure training needs are
met and hold employees accountable.

Delegate and Empower

Good leaders surround themselves with the right people in the right jobs.  This facilitates being
able to lead rather than manage.  For practice owners, this starts by hiring an effective manager
or administrator.  Depending on the size of the practice, an office manager, a practice manager or
a hospital administrator is the highest management position.  Practice owners need to begin the
process of effective delegation and empowerment with this individual.  All too often, veterinary
practices don’t have a practice manager with the necessary skills for their position or the practice
owner unwittingly sabotages this person’s success by overloading them with responsibility or
neglecting to empower them to achieve practice goals.

Effective Time Management

Part of being an effective leader includes effective time management.  If you spend most of your
time fielding complaints and reacting to problems, this may be a sign that you are not delegating
effectively or empowering team members.  Read some books or articles on time management
and create action steps to improve.
Unite 6
Corporate Governance and Leadership
Concept, scope significance and theories of corporate governance
What is Corporate Governance?
Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are
directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the
board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing
individual and societal goals, as well as, economic and social goals.

Corporate Governance is the interaction between various participants (shareholders, board of directors, and
company’s management) in shaping corporation’s performance and the way it is proceeding towards. The
relationship between the owners and the managers in an organization must be healthy and there should be no
conflict between the two. The owners must see that individual’s actual performance is according to the standard
performance. These dimensions of corporate governance should not be overlooked.

Corporate Governance deals with the manner the providers of finance guarantee themselves of getting a fair return
on their investment. Corporate Governance clearly distinguishes between the owners and the managers. The
managers are the deciding authority. In modern corporations, the functions/ tasks of owners and managers should be
clearly defined, rather, harmonizing.

Corporate Governance deals with determining ways to take effective strategic decisions. It gives ultimate authority
and complete responsibility to the Board of Directors. In today’s market- oriented economy, the need for corporate
governance arises. Also, efficiency as well as globalization are significant factors urging corporate governance.
Corporate Governance is essential to develop added value to the stakeholders.

Corporate Governance ensures transparency which ensures strong and balanced economic development. This also
ensures that the interests of all shareholders (majority as well as minority shareholders) are safeguarded. It ensures
that all shareholders fully exercise their rights and that the organization fully recognizes their rights.

Corporate Governance has a broad scope. It includes both social and institutional aspects. Corporate Governance
encourages a trustworthy, moral, as well as ethical environment.

Benefits of Corporate Governance

1. Good corporate governance ensures corporate success and economic growth.
2. Strong corporate governance maintains investors’ confidence, as a result of which, company can raise
capital efficiently and effectively.
3. It lowers the capital cost.
4. There is a positive impact on the share price.
5. It provides proper inducement to the owners as well as managers to achieve objectives that are in interests
of the shareholders and the organization.
6. Good corporate governance also minimizes wastages, corruption, risks and mismanagement.
7. It helps in brand formation and development.
8. It ensures organization in managed in a manner that fits the best interests of all.

corporate governance failures

It doesn’t happen overnight and there are several warning signs which a firm must take note of in
order to avoid such failures.Some of the governance issues faced by the firms which eventually
lead to corporate governance failures are –

 Ineffective governance mechanisms, for example, lack of board committees or

committees consisting of few or a single member.
 Non-independent board and audit committee members, for example where a CEO
fulfilled multiple roles in various committees
 Management, who deliberately undermines the role of the various governance
structures by circumventing the internal controls and making misrepresentations to
auditors and the Board.
 Inadequately qualified members, for example,audit committee members not having
appropriate accounting and financial qualifications or experience to analyse key business
transactions, family members holding board positions without appropriate knowledge or
qualifications.
 Ignorance by regulators,auditors, analysts etc of the financial results and red flags.

Challenges to good corporate governance

Corporate governance is the term used to describe the balance among participants in the corporate structure
who have an interest in the way in which the corporation is run, such as executive staff, shareholders and
members of the community. Corporate governance directly impacts the profits and reputation of the company,
and having poor policies can expose the company to lawsuits, fines, reputational damage, and loss of capital
investment. Here are five common pitfalls your corporate governance policies should avoid.

1) CONFLICTS OF INTEREST
Avoiding conflicts of interest is vital. A conflict of interest within the framework of corporate governance
occurs when an officer or other controlling member of a corporation has other financial interests that directly
conflict with the objectives of the corporation. For example, a board member of a solar company who owns a
significant amount of stock in an oil company has a conflict of interest because, while the board he or she
serves on represents the development of clean energy, they have a personal financial stake in the success of the
oil industry. When conflicts of interest are present, they deteriorate the trust of shareholders and the public
while making the corporation vulnerable to litigation.

2) OVERSIGHT ISSUES
Effective corporate governance requires the board of directors to have substantial oversight of the company’s
procedures and practices. Oversight is a broad term that encompasses the executive staff reporting to the board
and the board’s awareness of the daily operations of the company and the way in which its objectives are being
achieved. The board protects the interests of the shareholders, acting as a check and balance against the
executive staff. Without this oversight, corporate staff might violate state or federal law, facing substantial
fines from regulatory agencies, and suffering reputational damage with the public.  

3) ACCOUNTABILITY ISSUES
Accountability is necessary for effective corporate governance. From the top-level executives to lower-tier
employees, each level and division of the corporation should report and be accountable to another as a system
of checks and balances. Above all else, the actions of each level of the corporation is accountable to the
shareholders and the public. Without accountability, one division of the corporation might endanger the
success of the entire company or cause stockholders to lose the desire to continue their investment.

4) TRANSPARENCY
To be transparent, a corporation must accurately report their profits and losses and make those figures
available to those who invest in their company. Overinflating profits or minimizing losses can seriously
damage the company’s relationship with stockholders in that they are enticed to invest under false pretenses. A
lack of transparency can also expose the company to fines from regulatory agencies.
5) ETHICS VIOLATIONS
Members of the executive board have an ethical duty to make decisions based on the best interests of the
stockholders. Further, a corporation has an ethical duty to protect the social welfare of others, including the
greater community in which they operate. Minimizing pollution and eschewing manufacturing in countries that
don’t adhere to similar labor standards as the U.S. are both examples of a way in which corporate governance,
ethics, and social welfare intertwine.

Corporate governance practices and leadership in Nepalese organizations

Many believe that only public companies or large, established companies with many
shareholders need to be concerned about, or can benefit from, implementing corporate
governance practices. The reality is that all companies – big and small, private and public, early
stage or established – compete in an environment where good governance is a business
imperative. One size doesn’t fit all, but right-sized governance practices will positively impact
the performance and long-term viability of every company.

This belief that corporate governance “doesn’t apply” comes from a view that it’s only
theoretical and doesn’t impact the bottom line or performance, is costly to implement, is
“bureaucratic” (and slows decision-making), it can’t be tailored to a company’s size and stage of
development – or all of these. But in reality, all companies compete in an environment where
good governance is a business imperative in relation to things like:

 raising capital;
 securing debt;
 attracting and maintaining talented, qualified directors;
 meeting the demands and expectations of sophisticated shareholders; and
 preparing for potential acquisition / exit or next phase of growth.

CORPORATE GOVERNANCE BASICS

“Corporate governance” doesn’t have a single accepted definition.Broadly, the term describes
the processes, practices and structures through which a company manages its business and affairs
and works to meet its financial, operational and strategic objectives and achieve long-term
sustainability.

Law. Corporate governance is generally a matter of law based on corporate legislation, securities

laws and policies, and decisions of the courts and securities regulators.  Generally, directors owe
a duty of loyalty to the companies they serve, and have a fiduciary duty to act honestly, in good
faith and in the company’s best interests. Corporate governance is also shaped by other sources,
like stock exchanges, the media, shareholders and interest groups. Corporate governance
practices help directors meet their duties and the expectations of them.  

Relevant Factors. The objective of corporate governance is to promote strong, viable

competitive corporations accountable to stakeholders. But one size doesn’t fit every company,
and there’s no uniform, comprehensive set of policies or practices: the “right” ones depend on
several factors, including:

 the nature of the business;

 the company’s size and stage of development;
  availability of resources;
 shareholder expectations; and
 legal and regulatory requirements.

Benefits. Proponents of corporate governance say there’s a direct correlation between good

corporate governance practices and long-term shareholder value.  Some of the key benefits are:

 high performance Boards of Directors;

 accountable management and strong internal controls;
 increased shareholder engagement;
 better managed risk; and
 effectively monitored and measured performance.

TOP 5 CORPORATE GOVERNANCE BEST PRACTICES

Right-sized governance practices will positively impact long-term corporate performance – but
companies must design and implement those that both comply with legal requirements and meet
their particular needs. Here are the top 5 corporate governance best practices that every Board of
Directors can engage – and that will benefit every company.

1. Build a strong, qualified board of directors and evaluate

performance. Boards should be comprised of directors who are knowledgeable
and have expertise relevant to the business and are qualified and competent,
and have strong ethics and integrity, diverse backgrounds and skill sets, and
sufficient time to commit to their duties. How do you build – and keep – such a
Board?
o Identify gaps in the current director complement and the ideal qualities
and characteristics, and keep an “ever-green” list of suitable candidates
to fill Board vacancies.
o The majority of directors should be independent: not a member of
management and without any direct or indirect material relationship that
could interfere with their judgment.
o Develop an engaged Board where directors ask questions and challenge
management and don’t just “rubber-stamp” management’s
recommendations.
o Educate them. Give new directors an orientation to familiarize them with
the business, their duties and the Board’s expectations; reserve time in
Board meetings for on-going education about the business and
governance matters.
o Regularly review Board mandates to assess whether Directors are
fulfilling their duties, and undertake meaningful evaluations of their
performance. 
 
2. Define roles and responsibilities. Establish clear lines of accountability
among the Board, Chair, CEO, Executive Officers and management: 
 o Create written mandates for the Board and each committee setting out
their duties and accountabilities.
o Delegate certain responsibilities to a sub-group of directors. Typical
committees include: audit, nominating, compensation and corporate
governance committees and “special committees” formed to evaluate
proposed transactions or opportunities.
o Develop written position descriptions for the Board Chair, Board
committees, the CEO and executive officers.
o Separate the roles of the Board Chair and the CEO: the Chair leads the
Board and ensures it’s acting in the company’s long-term best interests;
the CEO leads management, develops and implements business strategy
and reports to the Board.
  
3. Emphasize integrity and ethical dealing. Not only must directors declare
conflicts of interest and refrain from voting on matters in which they have an
interest, but a general culture of integrity in business dealing and of respect and
compliance with laws and policies without fear of recrimination is critical.  To
create and cultivate this culture:
o  Adopt a conflict of interest policy, a code of business conduct setting
out the company’s requirements and process to report and deal with non-
compliance, and a Whistleblower policy.
o Make someone responsible for oversight and management of these
policies and procedures.
  
4. Evaluate performance and make principled compensation decisions. The
Board should:
o Set directors’ fees that will attract suitable candidates, but won’t create
an appearance of conflict in a director’s independence or discharge of
her duties.
o Establish measurable performance targets for executive officers
(including the CEO), regularly assess and evaluate their performance
against them and tie compensation to performance.
o Establish a Compensation Committee comprised of independent
directors to develop and oversee executive compensation plans
(including equity-based ones like stock option plans).
  
5. Engage in effective risk management. Companies should regularly identify
and assess the risks they face, including financial, operational, reputational,
environmental, industry-related, and legal risks:

o The Board is responsible for strategic leadership in establishing the

company’s risk tolerance and developing a framework and clear
accountabilities for managing risk. It should regularly review the
adequacy of the systems and controls management puts in place to
 identify, assess, mitigate and monitor risk and the sufficiency of its
reporting.
o Directors are responsible to understand the current and emerging short
and long-term risks the company faces and the performance
implications. They should challenge management’s assumptions and the
adequacy of the company’s risk management processes and procedures.

Leadership in Nepali Context

6. Whenever we talk about leadership in Nepal, the immediate image that comes to mind is of
politicians, who make promises but never deliver. The discourse of leadership in Nepal has
been judged not by performance, but by the number of titles one carries on one’s business
card, or the number of sycophants that hang out with one, the number of interviews and
pictures that one sees in the newspaper or the minutes of exposure on television.
7. Leadership in Nepal is still represented by the badges with ribbons that people wear at
functions, the sofa seats placed on the stage, or the individuals seated in the first rows, that
people crowd around. Leadership in Nepal is still defined by how late one can attend events
and how far one can exceed the allotted speaking time at meetings. It is still seen as a feudal
phenomenon whereby there has to be a significant gap between the leader and the follower.
8. The concept of leadership especially in a democratic set up is something that has flowered in
the West. The advent of corporations, the emergence of family trusts and foundations and the
start of the concept of not- for-profits brought about the concept of an organization that
polychromic societies found alien. People had to understand the rationale of having a chair-
man elected in a board of directors rather than nominating one’s son or relative, when looking
for someone to head a philanthropic organization, instead of appointing the eldest son to take
over.
9. One of the Rotary Clubs in Nepal is identified with a mother, whose daughter is identified
with another rotary club. The democratic substitution to leadership, contrary to hierarchy, is
still seen as unacceptable. The Alumni of Hubert Humphrey Fellows, a US based fellowship
elects its President based on seniority, therefore one can only head the organization once one
has passed the most active part of one’s life.
10. Because of the political influence associated with leadership in Nepal, one visualizes having
more than 10,000 people at Tundikhel listening in rapt attention while one speaks. The
linking of a leader to a patron is another outcome of our feudal past, which makes it even
more difficult to come out of the rut of the lopsided view of leadership.
11. The big question we forget to ask in Nepal, something that even our religions support, is to
ask ourselves: “Who am I?” Am I the person in the business card, whose identity is defined
by the name of the organization or the designation? If the name and designation is taken
away, who am I? Do I have followers then? The answer is most pertinent to persons such as a
recently retired bureaucrat or Minister who used to have hundreds of people hounding at their
door while they held that position. A leader is someone who still has the respect and
following, even without the label of an organization or designation.
12. In Nepal, the culture of doing and delivering without noise is not seen as a leadership trait,
while globally, leadership credibility is about constant and consistent delivery. Therefore,
work of people like Dr Ram Shrestha of Dhulikhel Hospital, who created one of Nepal’s
finest institutions in 15 years, goes unnoticed.
13. It is individuals like Dr Ram Shrestha that keep societies going. In every family, society and
community, we find individuals, who would take the initiative to reach out to those in need,
whenever there is grief or sickness in the family. There are these familiar faces that we find
at hospitals, bringing new patients every time or at the cremation ghats of Pashupati, helping
people in the execution of their final journey. Even though they have been helping for
decades, these people are never noticed. The same goes for teachers, who believe in
imparting education, unlike many others whose primary focus is on maintaining a smart face
for a newspaper interview to show their dedication to education. Leadership is about
replacing one’s desire for publicity with real action.

Impact of corporate governance practices on business and society