Motivation & Leadership Theories, Conflict Management

____________________________________________________________________________________________________
Subject COMMERCE
Paper No and 1: Management concept and organisational behaviour

Title
Module No and 19: Content Theories of Motivation

Title
Module Tag COM_P1_M19
COMMERCE PAPER 1: Management concept and organisational behaviour

MODULE No. : 19: Content Theories of Motivation
____________________________________________________________________________________________________
TABLE OF CONTENTS
1. Learning Outcomes
2. Introduction
3. Concept of Motivation
4. Theories of Motivation
4.1 Content theory of motivation
4.2 Process theory of motivation
4.3 Basic Difference between Content theories and Process Theories
5. Content theories
5.1Abraham Maslow’s Need Hierarchy theory: based on needs
5.2Clayton Alderfer’s ERG theory: based on needs
5.3 McClellands learned need theory: based on needs
5.4 Fredrick Herzberg’s two factor theory: based on factors
5.5 Douglas McGregor’s Theory X and theory Y: based on personality
5.6 Comparison between different content theories
6. Summary

____________________________________________________________________________________________________
After studying this module, we shall be able to
 Define the content theories of motivation

 Learn about different content theories of motivation.
 Apply the understanding of different motivation theories to enhance the contribution of
the employees in different work situations

____________________________________________________________________________________________________
4.1 Content Theories of Motivation
Theories that explain human behavior based on their needs are called content theories
Following are the content theories of motivation
 Abraham Maslow’s Need Hierarchy theory: based on needs

 Clayton Alderfer’s ERG theory: based on needs
 McClellands learned need theory: based on needs
 Fredrick Herzberg’s two factor theory: based on factors
 Douglas McGregor’s Theory X and theory Y: based on personality
5.Content Theories
5.1Abraham Maslow’s Need Hierarchy theory: based on needs
Abraham Maslow developed a general theory of motivation .he developed his theory of
motivation based on different needs of human beings. He identified certain set of needs that
human desires to have at various point of times. These needs move in a hierarchical mode level
by level. These were five different levels and every level has a certain needs. Once that level is
achieved, then those set of needs cease to be motivating factor and then we have to fulfill needs at
the next level. Also he further explained that these needs must be fulfilled in the correct sequence.
One cannot jump to next level without fulfillment of previous level needs i.e, one cannot go to
higher level needs without attaining lower level needs. Maslow hierarchy of needs are depicted
with the help of pyramid as pyramid of five levels which move from lower level needs to higher
level needs up in the pyramid. He further explains that various levels are interdependent and over
lapping i.e, each higher level need emerges before the lower need is completely satisfied .these
needs as given by Maslow are shown in fig 5 below:-

____________________________________________________________________________________________________
Figure 4: Maslow’s Need Hierarchy
1. Basic Physiological Needs: these needs fall in the very first level of the pyramid .these
are biological needs required for survival like food, air, water etc. These are also called
basic survival needs.
2. Safety Needs: once physiological needs are reasonably met, next a person looks for is
protection from physical dangers and economic security. All these needs fall under safety
/security needs.
3. Social Needs: man is a social animal. He needs to interact with people and seeks
association with people. Social needs refer to need for belonging, need for love and
affection etc. an organization can influence human behavior through supervision, its
communication system (formal and informal work groups).
4. Esteem needs; esteem needs can be sub divided into two parts: self –esteem and esteem
of others. Self esteem needs cover self respect, self confidence, knowledge and
independence. Esteem of others means reputation, status, recognition.
5. Self-actualization Needs- these needs are the needs that are highest order of needs. These
needs arise when one person desire to bring out his/her full potential, self development,
being creative etc.this need is psychological in nature.
Critical appraisal
The theory given by maslow is widely applicable in developing countries like India were
the basic lower loel needs of workers are not satisfied. Maslow theory seems to be very
____________________________________________________________________________________________________
simple when giving description about complex process of motivation .it is critised on the
following grounds:-
1. it is not necessary that the needs given by maslow follow the same sequence. Need
recognition and fulfillment do not always the specific sequence or hierarchy as decribed
by maslow.
2. neeeds are not the only determinant for influencing human behavior.
3. there is also no particular rule that once a need of particular level is satiffied it will
cease to be a motivationg factor for the individual.
4. also same kind of needs may not have same level of motivation on different
individuals.
5.it is also wrong to presume that only one need can be satisfied at one time. Human
behavior is guided by multiplicity of motives at any given point of time.
5.2 Herzberg’s Two – Factor Theory
This theory of motivation is based on factors that operate on work place. In late 50’s
Fredrick Herzberg started a study on a sample of approximately 200 engineers and
accountants in United States.in this study the persons were asked to describe the
factors in there which made them happy and also to list out factors that made them
unhappy.thee result of the study led to certain very important findings. It was seen
that employees felt good for the factors that were related to specific tasks they
performed and they felt bad because of absence of certain background factors at
work.
This led to a finding that there are two different set factors that operate in a work place.
1. Motivation factors (based on job context)

2. Hygiene factors (based on job content )
Motivation Factors- motivation factors referes to those factors which provide

opportunites to emploeees to becoe more expert and handle more demanding
assignments. They provide employees opportunites of growth achievement and
recognition . the presence of these led to high motivation among employees
Hygiene Factors- these factors served to prevent loss of money and efficiency. These
factors were more potent to be dissatisfiers. They were also called Maintenece factors.it
was seen that the presence of these factors didn’t led to motivation among employees but
there absence led to dissatisfaction. So they were to be taken as factors desired to be
present in order to support employee mental health. To maintain the employee. But these
factors didn’t led to motivation.

____________________________________________________________________________________________________
Figure 6 below lists out the various hygeince and motivating factors.
Figure 5:-Motivators and Hygiene Factors
The basic crux of this theory was that one cannot achieve higher performance solely
by giving high wages and having good work conditions. These factors were pointed
out to be mere maintenance factors this theory stressed on job enrichment as a source
of motivation. This was a significant contribution as it helped mangers to understand
human behavior better.
Critical appraisal
 Herzberg’s findings are based on a small sample of 200 engineers and
accountants and are not representative of general work force.
• His theory cannot be generalized as it failed to produce similar results later.
• Though the theory holds good for people working at higher levels, it may not
apply to workers at the operative levels.
• It is difficult to categorize the factors as satisfiers or dissatisfiers. Also factors
that are dissatisfiers for some may be motivators for others.
• Many researchers have found results opposite to Herzberg’s findings. They
have shown that absence of motivators can be dissatisfying and presence of hygiene
factors can motivate the employees to work harder.

____________________________________________________________________________________________________
5.3 Douglas McGregor Theory X and Theory Y
Douglas McGregor was a well know physcologist. He gave two set of contrasting
theories .Theory X and Theory y based on certain assumptions of human behavior.
Under theory X the basic assumptions were that employees inherently disliked theier
work and lacked ambition. They avoided responsibility and need to be directed. The
employees under theory X were assumed to be lacking creativity and resistined
change.under theory x employees were taken as a means of production. This theory
represented old stereotyped and authoritarian mangement style of motivation where
carrot and stick approach to motivation was applied.
But later on it was seen that there was a rise in the standard of living of people. There
was significant improvement in the level of literacy. And theory X didn’t seem a
valid explanation for all the employees. This led to development of Theory Y.
After theory x ,McGregor developed an alterate theory Y of human behavior. This

theory assumed that people do not inherently dislike their job,work is a natural paly if
working conditions arre conducive. People are internally motivated and need not be
guided. They have amibitons and have creativity.the people are self motivated
towards achievement of goals. The motivating approach for theory Y people was said
to be democratic or participative style of leadership. Theory Y people were not
merely motivated by money. These people had higher level of needs as propounded
by maslow
Figure 6: Comparison of Theory x and Theory y assumptions
Critical Appraisal
The two theories given by mcgregor are never alone applicable in a strict manner. No
man would either belong to theory x or theory y completely. A person has the traits
of both theories in different situations at different point of times.thus this theory plays
____________________________________________________________________________________________________
an important role in devising incentive schemes to motivate the employees. However

it can be deduced that theory x is more applicable to lower level or unskilled
employees and theory y is more applicable to higher level of employees or educated
,skilled workers.
5.4 Clayton Alderfer’s ERG theory: based on needs
Clayton P. Alderfer gave ERG Theory of Motivation in 1969 in his article, "An Empirical
Test of a New Theory of Human Need.” The ERG theory attempted to improve upon
Maslow's needs hierarchy by allowing more flexibility of movement between needs. Under
this theory Alderfer attempted to reduce the five of levelsof needs as given by maslow and
allowed the order of the needs to vary by the individual; he also accepted and explained that
different needs can be pursued simultaneously. There were three categories of Needs were
according to Alderfers:
1.Existence Needs: Physiological and safety needs, the most concrete of needs, such as
food, shelter, and water.
2. Relatedness Needs: Social relationships and external esteem (e.g. involvement with
family, friends, co-workers)
3. Growth Needs: Internal esteem and self-actualization, the most abstract of needs as they
do not involve physical aspects. (e.g. desire to be creative or productive)
While Maslow’s theory was interpreted as portraying that satisfied needs are no longer a
motivation (O’Connor & Yballe, 2007), Alderfer’s ERG theory clearly states that all
categories of needs can become more important as they are satisfied. Additionally,
individuals may place greater emphasis on any single category as opposed to the rigid
hierarchy of moving from one need to the next (Alderfer, 1969). The main difference
between Maslow's Needs Hierarchy and Alderfer's ERG Theory is the order in which needs
are met. Alderfer argued that needs are met simultaneously and have no specific order, while
Maslow's theory asserted that needs follow a proper flow and sequence from lower level
needs to higher level. The following illustration depicts Alderfer’s ERG theory.

____________________________________________________________________________________________________
Figure: 7 ERG theory Needs

____________________________________________________________________________________________________
Table 2: Reorhanization of Maslow’s and Alderfer’s level of needs
Source:- https://wikispaces.psu.edu/display/PSYCH484/2.+Need+Theories
5.5 McClelland’s learned need theory
McClleland identified three types of motivation needs, and delveoped his

theory based on these needs. His theory described one’s style of
motivating or gettibg motivated by developing a three need model
depending upon dfferent level of needs withing the individual.these three
level of need were:
1.Need for Power- desire to control others, to influence their behavior or

to be responsible for others
2.Need for afflaition- the desire to establish and maintain friendly and
warm relations with others
3.Need for achievement- desire to do something better or more efficiently

,to solve problems, or to master complex tasks

____________________________________________________________________________________________________
Figure 8 :- McClleland learned need model
Critical appraisal
 Mcclleland theory of needs is mouch simple to understand

 It has more empeical support as compared to ther theories of motivation
 But this theory has less practical effect
 The needs decicbed by mcclleland are present at subconscious level of
human being and chances are a person might not be aware of such needs
 Owing to reason above it is also difficult to measure and cater these needs by
managers

____________________________________________________________________________________________________
5.6 Comparison of Content Theories
Figure 9:- Brief snapshot of content theories

____________________________________________________________________________________________________
6. Summary
 Motive is the desire the makes a man move

 A manger can influence the behavior of employee by fulfilling these
motives
 Two set of theories of motivation are present; content theories and
process theories
 Content theories focus on individual needs
 Process theories focus on cognitive processes
 Maslow theory of motivation describes five levels of needs that flow in a
sequence from lower order needs to higher order
 Herzberg theory is based on factor present at work
 Hygiene factors are the source of dissatisfaction and therefore should be
properly addressed to in order to reduce job dissatisfaction
 Motivating factors are related to job content and must be increased in
order to increase job satisfaction
 Theory X and Theory Y as given by McGregor points out two set of
assumptions of human behavior based on which a manger can apply
different incentive schemes to motivate employees
 Alderfer theory is one step improvement in Maslow’s hierarchy theory .it
reduces the number of levels from five to three i.e, existence, relatedness
and growth
 Lastly Mccllelnad theory which is regarded as more empirical has three
level needs in its model namely need for afflation, need for power and
need for achievement.

____________________________________________________________________________________________________
Subject COMMERCE
Paper No and Title 1: Management concept and Organizational behaviour
Module No and Title 20: Process Theories of Motivation
COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

ORGANIZATIONAL BEHAVIOUR
MODULE No.20 : PROCESS THEORIES OF MOTIVATION
____________________________________________________________________________________________________
TABLE OF CONTENTS
2. Introduction
3. Types of Process Theories of Motivation:
1) Vroom’s Expectancy Theory
2) Needs-Goal Theory
3) Adam’s Equity Theory
4) The Porter- Lawler Model
4. Content vs. Process theory of motivation
5. Summary

____________________________________________________________________________________________________
 Identify the concept of process theory of motivation.

 Appreciate the need for modern theories of motivation.
 Learn about different process theories of motivation.
 Understand about the importance of these theories.
 Differentiate between the content and process theory of motivation.
2. Introduction
Process theories study and explain the motivation from individual’s thought process
perspective. They attempt to identify the key variables and their interrelationship that
explains the direction, degree and persistence of individual’s efforts. The chief variables
involved in process being drives, incentives, expectancy and reinforcement. It discovers
`why’ and `how’ people feel motivated by selecting one action over the other. They
elucidate and illustrate how individuals initiate, continue and direct their behavior for
reducing their inner tension and satisfying needs.
3. Types of process theories of motivation

There are mainly four types of theories of motivation which have studied and explained
motivation from process perspective. Vroom, Locke, Adam and Porter-Lawler studied
motivation from “process” viewpoint.

____________________________________________________________________________________________________
Figure: 1 Process Theories of Motivation
3.1) Vroom’s Expectancy Theory:
Victor H. Vroom gave the Expectancy Theory in 1964 as a systematic explanatory theory
of work place motivation. According to Expectancy theory individual’s behavior is
determined by the assessment of rewards against the efforts. This theory emphasizes that
motivation to act in a particular manner is the result of individual’s expectation
- that his behavior will lead to a desired reward
- this reward will be able to satisfy an important need

- the wish to gratify this need is significant enough to lead to an effort.
Expectancy Theory has three variables namely -Expectancy, Instrumentality and Valence
such as Motivation = Expectancy x Instrumentality x Valence

____________________________________________________________________________________________________
Figure 2: Relation between Expectancy, Instrumentality and Valence
Figure 3: Motivation Formula According To Vroom

____________________________________________________________________________________________________
The above figure explains that Motivation is the end product of expectancy,
instrumentality and valence where an individual can achieve valued rewards by
performing as per the expectations by putting appropriate efforts. Motivation is
determined by the perceived value of the outcome of performing an action and the
perceived probability that these actions will cause the result to materialize. Individuals
have a tendency to perform in a manner that is capable of maximizing their reward over
the long term.
According to Expectancy theory the overall evaluation process is divided into series of
questions like:
1. Can I perform efficiently if I put in sincere efforts?
2. Will I be able to achieve the desired results by performing these tasks?
3. Can I expect that desired results will be rewarding and significant to me?
3.2 Locke’s Needs-Goal Theory
Edwin Locke propounded the Need Goal Theory in 1968, which puts forward that
setting of challenging but attainable goals along with strong feedback mechanism
tend to enhance the motivation and leads to better performance. According to this
theory, the main source of motivation is the intention to work towards a goal as these
goals tell an employee what all things they are required to do to accomplish them.
Generally, it is believed higher the goal’s difficulty level, more enhanced is the level
of performance expected. Motivation instigates with a need felt by an individual. This
need is then converted into the behavior aimed at supporting, the performance of goal
behavior to satisfy that need. As per this theory employees are likely to work
effectively towards goal when they are involved in goal setting process and also when
they get timely feedback on their progress. However, besides feedback there are few
other factors which influence the goal-performance relationship like-
 Employee’s commitment to the goals.
 Employee’s belief in their capabilities.
 Nature of tasks involved in achievement of those goals.

____________________________________________________________________________________________________
Figure 4: Major Findings of the theory
It is possibly a fundamental theory that recommends that though the goal should be fixed
at highest level but certain room for honest mistakes should be allowed to employees as
they strive to work towards these goals.
3. 3 Adam’s Equity Theory:
Equity Theory was set forth by John Stacey Adam in 1963. It propose that if the
employees feel that rewards received are fair, equitable and just in comparison to those
received by others, then they feel content and satisfied. As per this theory employees look
for retaining equity between the efforts that they put in job and results that they get from
them in alignment with the perceived efforts and results of others. However if any
considerable difference is noted in this regard then employees try to bring equity by
amending their own performance or making minor adjustments in co-workers level.
Similarly, they monitor related rewards too to always sustain the feeling of equity. And
for doing so they take number of steps like:

____________________________________________________________________________________________________
Figure 5: Steps taken by employees to be in state of equity
Equity theory study motivation as an employee’s supposed equality of a service condition

and concludes that changes in employee behavior are primarily because of these
Supposed inequalities.
Figure 6: Comparison between the state of equity and inequity.

____________________________________________________________________________________________________
3. 4 the Porter- Lawler Model:

This theory was propounded by Lyman W. Porter and Edward E. Lawler in 1968 based
on Vroom’s Expectancy Theory and is consider the most comprehensive theory of
workplace motivation so far. It is the extended and expanded version of Vroom’s
Expectancy theory as it explains motivation in an integrated manner taking into account
additional aspects- intrinsic and extrinsic rewards. Though this theory recognizes the fact
that human behavior is the outcome of felt need and the perceived value of rewards
determine the efforts directed to complete a task and the likelihood of these rewards
getting materialize, it also highlights the significance of above mentioned two types of
rewards that employees might expect to earn upon achieving a goal.
Intrinsic Rewards: These refer to positive feelings arising within employees and
experienced by them from completing the task like self fulfillment or feeling of self
accomplishment or sense of achievement.
Extrinsic Rewards: These refer to rewards originating from outside the person like pay
hike, bonus, commission etc.
Figure 7: The Porter- Lawler Model
Porter- Lawler by means of above model suggested that all individuals rationally acting
in the process make conscious selection of their behavior and have unique level of drive
____________________________________________________________________________________________________
and efforts. This model precisely illustrate that the level

of efforts are related directly to performance at work which consecutively is proportional
to the level of awards received. The real performance on a job is the cumulative result of
individual’s ability, his willingness, and his perception of the job and also by the amount
of efforts he puts. In other words performance is the key factor leading to intrinsic and
extrinsic rewards, which in conjunction with the equity of results in satisfaction. That's
why; fairness of the reward makes it more satisfying. However the major practical
limitations are the intricacy of the model and the requirement to give valuable rewards to
all employees, but still by far it is the best model of workforce motivation. In spite of
being the notion of motivation so difficult to explain, this model beautifully and clearly
makes it comprehensible to all.

____________________________________________________________________________________________________
4. Content Theory v/s Process Theories of Motivation:
BASIS CONTENT THEORIES PROCESS THEORIES

Focus They Focus on factors They focus on dynamics of
within the individual that motivation and how the
leads to motivation. process of motivation takes
place.
Explain They explain individual They explain thought
needs. process behind an
individual’s behavior.
Answer Why people are motivated How people initiate, direct
in different ways and in and explain their
different situations and motivation?
What factors motivate
them?
Types  Maslow’s Hierarchy • Locke’s Needs-Goal
of Needs Theory
 Aldefer’s ERG • Adam’s Equity
Theory Theory
 McGregory’s • The Porter- Lawler
Theory X and Model
Theory Y • Vroom’s
 Herzberg’s Two- Expectancy Theory
Factor Theory
 McClelland’s
Achievement,
Power and
affiliation needs.
Identify They identify the types of They identify the variables
needs, prioritize them and that go into motivation
find incentives that lead to process and the relation
fulfillment of those needs. between them.

____________________________________________________________________________________________________
5. Summary:
 Process theories gives explanation of the concept of motivation from individual’s

thought process perspective.
 They make an attempt to explain the notion of motivation as an indication of our
cognitive and rational thinking process.
 The chief variables involved in process being drives, incentives, expectancy and
reinforcement.
 Victor H. Vroom gave the Expectancy Theory in 1964 is a systematic explanatory
theory of work place motivation.
 According to Expectancy theory individual’s behavior is determined by the
assessment of rewards against the efforts and motivation is the end product
expectancy, instrumentality and valence.
 Edwin Locke propounded the Need Goal Theory in 1968, According to which, the
main source of motivation is the intention to work towards a goal.
 Equity Theory was set forth by John Stacey Adam in 1963 which proposes that if
the employees feel that rewards received are fair, equitable and just in comparison
to those received by others, then they feel content and satisfied.
 The Porter- Lawler Model is the extended and expanded version of Vroom’s
Expectancy theory as it explains motivation in an integrated manner taking into
account additional aspects- intrinsic and extrinsic rewards.
 The major difference between the content theories and process theories of
motivation is that while content theories emphasis on what are the factors, forces,
urges and needs that direct human behavior then on the other hand process
theories emphasis on how and why human behavior is directed towards certain
choices throughout the process.

LEADERSHIP
THEORIES
For SEBI Grade A & RBI Grade B

Leadership Theories Free Management e-book
Leadership Theories
I. Blake and Mouton’s Managerial Grid
Robert Blake and Jane Mouton (1960s) proposed a graphic portrayal of leadership styles
through a managerial grid (sometimes called leadership grid).
The grid depicted two dimensions of leader behaviour, concern for people (accommodating
people’s needs and giving them priority) on y-axis and concern for production (keeping tight
schedules) on x-axis, with each dimension ranging from low (1) to high (9), thus creating 81
different positions in which the leader’s style may fall.
The five resulting leadership styles are as follows:

1. Impoverished Management (1, 1): Managers with this approach are low on both the
dimensions and exercise minimum effort to get the work done from subordinates. The
leader has low concern for employee satisfaction and work deadlines and as a result
disharmony and disorganization prevail within the organization. The leaders are
termed ineffective wherein their action is merely aimed at preserving job and
seniority.
2. Task management (9, 1): Also called dictatorial or perish style. Here leaders are more
concerned about production and have less concern for people. The style is based on
theory X of McGregor. The employees’ needs are not taken care of and they are simply
a means to an end. The leader believes that efficiency can result only through proper
organization of work systems and through elimination of people wherever possible.
Such a style can definitely increase the output of organization in short run but due to
the strict policies and procedures, high labour turnover is inevitable.
3. Middle-of-the-Road (5, 5): This is basically a compromising style wherein the leader
tries to maintain a balance between goals of company and the needs of people. The
leader does not push the boundaries of achievement resulting in average performance
for organization. Here neither employee nor production needs are fully met.
4. Country Club (1, 9): This is a collegial style characterized by low task and high people
orientation where the leader gives thoughtful attention to the needs of people thus
providing them with a friendly and comfortable environment. The leader feels that
such a treatment with employees will lead to self-motivation and will find people
working hard on their own. However, a low focus on tasks can hamper production and
lead to questionable results.
5. Team Management (9, 9): Characterized by high people and task focus, the style is
based on the theory Y of McGregor and has been termed as most effective style
according to Blake and Mouton. The leader feels that empowerment, commitment,
trust, and respect are the key elements in creating a team atmosphere which will
automatically result in high employee satisfaction and production.
II. House’s Path Goal Theory

The theory was developed by Robert House and has its roots in the expectancy theory of
motivation.
The theory is based on the premise that an employee’s perception of expectancies between
his effort and performance is greatly affected by a leader’s behaviour. The leaders help group
members in attaining rewards by clarifying the paths to goals and removing obstacles to
performance.
They do so by providing the information, support, and other resources which are required by
employees to complete the task.
House’s theory advocates servant leadership. As per servant leadership theory, leadership is
not viewed as a position of power. Rather, leaders act as coaches and facilitators to their
subordinates. According to House’s path-goal theory, a leader’s effectiveness depends on
several employee and environmental contingent factors and certain leadership styles.
All these are explained in the figure 1 below:
III. Path-Goal Leadership Theory
Leadership Styles
The four leadership styles are:
1. Directive: Here the leader provides guidelines, lets subordinates know what is
expected of them, sets performance standards for them, and controls behaviour when
performance standards are not met. He makes judicious use of rewards and
disciplinary action. The style is the same as task-oriented one.
2. Supportive: The leader is friendly towards subordinates and displays personal concern
for their needs, welfare, and well-being. This style is the same as people-oriented
leadership.
3. Participative: The leader believes in group decision-making and shares information

with subordinates. He consults his subordinates on important decisions related to
work, task goals, and paths to resolve goals.
4. Achievement-oriented: The leader sets challenging goals and encourages employees

to reach their peak performance. The leader believes that employees are responsible
enough to accomplish challenging goals. This is the same as goal-setting theory.
According to the theory, these leadership styles are not mutually exclusive, and leaders are
capable of selecting more than one kind of a style suited for a particular situation.
Contingencies
The theory states that each of these styles will be effective in some situations but not in
others. It further states that the relationship between a leader’s style and effectiveness is
dependent on the following variables:
1. Employee characteristics: These include factors such as employees’ needs, locus of
control, experience, perceived ability, satisfaction, willingness to leave the
organization, and anxiety.
For example, if followers are highly skilled, a directive style of leadership may be
unnecessary; instead, a supportive approach may be preferable.
2. Characteristics of work environment: These include factors such as task structure and
team dynamics that are outside the control of the employee.
• For example, for employees performing simple and routine tasks, a supportive
style is much effective than a directive one.
• Similarly, the participative style works much better for non-routine tasks than
routine ones.
• When team cohesiveness is low, a supportive leadership style must be used
whereas in a situation where performance-oriented team norms exist, a
directive style or possibly an achievement-oriented style works better.
• Leaders should apply directive style to counteract team norms that oppose the
team’s formal objectives.
IV. Great Man Theory of Leadership

Assumptions
• The leaders are born and not made and possess certain traits which were inherited
• Great leaders can arise when there is a great need.
Historian Thomas Carlyle who commented on the great men or heroes of the history saying that “the
history of the world is but the biography of great men”.
According to him, a leader is the one gifted with unique qualities that capture the imagination of the
masses.
The great man theory of leadership states that some people are born with the necessary attributes
that set them apart from others and that these traits are responsible for their assuming positions of
power and authority. A leader is a hero who accomplishes goals against all odds for his followers. The
theory implies that those in power deserve to be there because of their special endowment.
Furthermore, the theory contends that these traits remain stable over time and across different
groups. Thus, it suggests that all great leaders share these characteristics regardless of when and
where they lived or the precise role in the history they fulfilled.
V. Trait Theory of Leadership

The trait model of leadership is based on the characteristics of many leaders - both successful
and unsuccessful - and is used to predict leadership effectiveness. The resulting lists of traits
are then compared to those of potential leaders to assess their likelihood of success or failure.
Successful leaders definitely have interests, abilities, and personality traits that are different
from those of the less effective leaders. Through many researchers conducted in the last three
decades of the 20th century, a set of core traits of successful leaders have been identified.
These traits are not responsible solely to identify whether a person will be a successful leader
or not, but they are essentially seen as preconditions that endow people with leadership
potential.
Among the core traits identified are:
• Achievement drive: High level of effort, high levels of ambition, energy, and initiative
• Leadership motivation: an intense desire to lead others to reach shared goals
• Honesty and integrity: trustworthy, reliable, and open
• Self-confidence: Belief in one’s self, ideas, and ability
• Cognitive ability: Capable of exercising good judgment, strong analytical abilities, and
conceptually skilled
• Knowledge of business: Knowledge of industry and other technical matters
• Emotional Maturity: well adjusted, does not suffer from severe psychological
disorders.
• Others: charisma, creativity, and flexibility
VI. Leadership-Member Exchange (LMX) Theory

According to the theory, leaders form different kinds of relationships with various groups of
subordinates.
One group, referred to as the in-group, is favoured by the leader. Members of in-group
receive considerably more attention from the leader and have more access to the
organizational resources.
By contrast, other subordinates fall into the out-group. These individuals are disfavoured by
the leader. As such, they receive fewer valued resources from their leaders.
Leaders distinguish between the in-group and out-group members on the basis of the
perceived similarity with respect to personal characteristics, such as age, gender, or
personality. A follower may also be granted an in-group status if the leader believes that
person to be especially competent at performing his or her job.
The relationship between leaders and followers follows three stages:
• Role taking: When a new member joins the organization, the leader assesses the
talent and abilities of the member and offers them opportunities to demonstrate their
capabilities.
• Role making: An informal and unstructured negotiation on work-related factors takes
place between the leader and the member. A member who is similar to the leader is
more likely to succeed. A betrayal by the member at this stage may result in him being
relegated to the out-group
In-group followers tend to function as assistants or advisers and to have higher quality
personalized exchanges with the leader than do out-group followers. These exchanges
typically involve a leader’s emphasis on assignments to interesting tasks, delegation of
important responsibilities, information sharing, and participation in the leader’s decisions, as
well as special benefits, such as personal support and support and favourable work schedules.
VII. Transformational Leadership Theory

Transformational leadership may be found at all levels of the organization: teams,
departments, divisions, and organization as a whole. Such leaders are visionary, inspiring,
daring, risk-takers, and thoughtful thinkers. They have a charismatic appeal. But charisma
alone is insufficient for changing the way an organization operates. For bringing major
changes, transformational leaders must exhibit the following four factors:
Model of Transformational Leadership
Inspirational Motivation: The foundation of transformational leadership is the promotion

of consistent vision, mission, and a set of values to the members. Their vision is so
compelling that they know what they want from every interaction. Transformational
leaders guide followers by providing them with a sense of meaning and challenge. They
work enthusiastically and optimistically to foster the spirit of teamwork and
commitment.
Intellectual Stimulation: Such leaders encourage their followers to be innovative and

creative. They encourage new ideas from their followers and never criticize them publicly
for the mistakes committed by them. The leaders focus on the “what” in problems and
do not focus on the blaming part of it. They have no hesitation in discarding an old
practice set by them if it is found ineffective.
Idealized Influence: They believe in the philosophy that a leader can influence followers
only when he practices what he preaches. The leaders act as role models that followers
seek to emulate. Such leaders always win the trust and respect of their followers through
their action. They typically place their followers needs over their own, sacrifice their
personal gains for them, ad demonstrate high standards of ethical conduct. The use of
power by such leaders is aimed at influencing them to strive for the common goals of the
organization.
Individualized Consideration: Leaders act as mentors to their followers and reward them
for creativity and innovation. The followers are treated differently according to their
talents and knowledge. They are empowered to make decisions and are always provided
with the needed support to implement their decisions.
VIII. Transactional Leadership Theory

The transactional style of leadership was first described by Max Weber in 1947 and then by
Bernard Bass in 1981. This style is most often used by the managers. It focuses on the basic
management process of controlling, organizing, and short-term planning.
Transactional leadership involves motivating and directing followers primarily through
appealing to their own self-interest. The power of transactional leaders comes from their
formal authority and responsibility in the organization. The main goal of the follower is to
obey the instructions of the leader. The style can also be mentioned as a ‘telling style’.
The leader believes in motivating through a system of rewards and punishment. If a
subordinate does what is desired, a reward will follow, and if he does not go as per the wishes
of the leader, a punishment will follow. Here, the exchange between leader and follower takes
place to achieve routine performance goals.
These exchanges involve four dimensions:
Contingent Rewards: Transactional leaders link the goal to rewards, clarify expectations,
provide necessary resources, set mutually agreed upon goals, and provide various kinds
of rewards for successful performance. They set SMART (specific, measurable,
attainable, realistic, and timely) goals for their subordinates.
Active Management by Exception: Transactional leaders actively monitor the work of

their subordinates, watch for deviations from rules and standards and taking corrective
action to prevent mistakes.
Passive Management by Exception: Transactional leaders intervene only when

standards are not met or when the performance is not as per the expectations. They may
even use punishment as a response to unacceptable performance.
Laissez-faire: The leader provides an environment where the subordinates get many
opportunities to make decisions. The leader himself abdicates responsibilities and avoids
making decisions and therefore the group often lacks direction.
Assumptions of Transactional Theory
• Employees are motivated by reward and punishment.

• The subordinates have to obey the orders of the superior.
• The subordinates are not self-motivated. They have to be closely monitored and
controlled to get the work done from them.
Difference between Transactional and Transformational Leaders
Transactional leadership Transformational Leadership
Leadership is responsive Leadership is proactive
Works within the organizational culture Work to change the organizational culture by
implementing new ideas
Transactional leaders make employees Transformational leaders motivate and empower

achieve organizational objectives employees to achieve company’s objectives by
through rewards and punishment appealing to higher ideals and moral values
Motivates followers by appealing to Motivates followers by encouraging them to

their own self-interest transcend their own interests for those of the
group or unit
IX. Continuum of Leadership Behaviour

The leadership continuum was originally written in 1958 by Tannenbaum and Schmidt and
was later updated in the year 1973. Their work suggests a continuum of possible leadership
behaviour available to a manager and along which many leadership styles may be placed.
The continuum presents a range of action related to the degree of authority used by the
manager and to the area of freedom available to non-managers in arriving at decisions. A
broad range of leadership styles have been depicted on the continuum between two
extremes of autocratic and free rein.
The left side shows a style where control is maintained by a manager and the right side shows
the release of control. However, neither extreme is absolute and authority and freedom are
never without their limitations.
The Tannenbaum and Schmidt continuum can be related to McGregor’s supposition of Theory
X and Theory Y. Boss-centred leadership is towards theory X and subordinate-centred
leadership is towards theory Y.
A manager is characterized according to degree of control that is maintained by him.

According to this approach, four main styles of leadership have been identified:
1. Tells: The manager identifies a problem, chooses a decision, and announces this to
subordinates. The subordinates are not a party to the decision-making process and
the manager expects them to implement his decisions as soon as possible.
2. Sells: The decision is chosen by the manager only but he understands that there will
be some amount of resistance from those faced with the decision and therefore
makes efforts to persuade them to accept it.
3. Consults: Though the problem is identified by the manager, he does not take a final
decision. The problem is presented to the subordinates and the solutions are
suggested by the subordinates.
4. Joins: The manager defines the limits within which the decision can be taken by the
subordinates and then makes the final decision along with the subordinates.
According to Tannenbaum and Schmidt, if one has to make a choice of the leadership style
which is practicable and desirable, then his answer will depend upon the following three
factors:
Forces in the Manager: The behavior of the leader is influenced by his personality,
background, knowledge, and experience.
These forces include:
• Value systems
• Confidence in subordinates
• Leadership inclinations
• Feelings of security in an uncertain situation
Forces in the subordinate: The personality of the subordinates and their expectations from
the leader influences their behaviour.
The factors include:
• Readiness to assume responsibility in decision-making

• Degree of tolerance for ambiguity
• Interest in the problem and feelings as to its importance
• Strength of the needs for independence
• Knowledge and experience to deal with the problem
• Understanding and identification with the goals of the organization
If these factors are on a positive side, then more freedom can be allowed to the subordinate
by the leader.
Forces in the situation: The environmental and general situations also affect the leader’s
behaviour.
These include factors like:
• Type of organization
• Group effectiveness
• Nature of the problem
• Time pressure
When the authors updated their work in1973, they suggested a new continuum of patterns
of leadership behaviour. In this, the total area of freedom shared between managers and non-
managers is redefined constantly by interactions between them and the environmental
forces. This pattern was, however, more complex in comparison to the previous one.
Conclusion
According to Tannenbaum and Schmidt, successful leaders know which behaviour is the most
appropriate at a particular time. They shape their behaviour after a careful analysis of self,
their subordinates, organization, and environmental factors.
X. Likert’s Management System

Rensis Likert and his associates studied the patterns and styles of managers for three decades
at the University of Michigan, USA, and identified a four-fold model of management systems.
Characteristics of different types of organizations.
The four systems of management system or the four leadership styles identified by Likert are:
System 1 - Exploitative Authoritative: Responsibility lies in the hands of the people at the
upper echelons of the hierarchy. The superior has no trust and confidence in subordinates.
The decisions are imposed on subordinates and they do not feel free at all to discuss things
about the job with their superior. The teamwork or communication is very little, and the
motivation is based on threats.
System 2 - Benevolent Authoritative: The responsibility lies at the managerial levels but not
at the lower levels of the organizational hierarchy. The superior has condescending
confidence and trust in subordinates (master-servant relationship). Here again, the
subordinates do not feel free to discuss things about the job with their superior. The
teamwork or communication is very little, and motivation is based on a system of rewards.
System 3 - Consultative: Responsibility is spread widely through the organizational hierarchy.
The superior has substantial but not complete confidence in subordinates. Some amount of
discussion about job related things takes place between the superior and subordinates. There
is a fair amount of teamwork, and communication takes place vertically and horizontally. The
motivation is based on rewards and involvement in the job.
System 4 - Participative: Responsibility for achieving the organizational goals is widespread

throughout the organizational hierarchy. There is a high level of confidence that the superior
has in his subordinates. There is a high level of teamwork, communication, and participation.
The nature of these four management systems has been described by Likert through a profile
of organizational characteristics.
In this profile, the four management systems have been compared with one another on the
basis of certain organizational variables which are:
• Leadership processes
• Motivational forces
• Communication process
• Interaction-influence process
• Decision-making process
• Goal setting or ordering
• Control processes
On the basis of this profile, Likert administered a questionnaire to several employees

belonging to different organizations and from different managerial positions (both line and
staff). His studies confirmed that the departments or units employing management practices
within Systems 1 and 2 were the lease productive, and the departments or units employing
management practices within Systems 3 and 4 were the most productive.
XI. Hersey Blanchard Model

According to this model, the leader has to match the leadership style according to the
readiness of subordinates which moves in stage and has a cycle. Therefore, this theory is also
known as the life-cycle theory of leadership.
The theory, developed by Paul Hersey and Kenneth Blanchard, is based on the ’readiness’
level of the people the leader is attempting to influence. Readiness is the extent to which
followers have the ability and willingness to accomplish a specific task.
Ability is the knowledge, experience, and skill that an individual possesses to do the job and
is called job readiness. Willingness is the motivation and commitment required to accomplish
a given task. The style of leadership depends on the level of readiness of the followers.
The readiness(R) is divided into a continuum of four levels which are:

R1 - low follower readiness - refers to low ability and low willingness of followers i.e.
those who are unable and insecure
R2 - low to moderate follower readiness - refers to low ability and high willingness of
followers i.e. those who are unable but confident
R3 - moderate to high follower readiness - refers to high ability and low willingness of
followers i.e. those who are able but insecure
R4 - high follower readiness - refers to high ability and high willingness of followers i.e.
those who are both able and confident
The direction is provided by the leader at the lower levels of readiness. Therefore, the
decisions are leader directed. On the other hand, the direction is provided by the followers at
the higher levels of readiness. Therefore, the decisions in this case are follower directed.
When the followers move from low levels to high levels of readiness, the combinations of task
and relationship behaviours appropriate to the situation begin to change.
For each of the four levels of readiness, the leadership style used may be a combination of
task and relationship behaviour.
• Task behaviour: Extent to which the leader spells out the duties and responsibilities
of a follower which includes providing them direction, setting goals, and defining roles
for them. Usually a one-way communication exists which is meant to provide the
direction to the followers.
• Relationship behaviour: Extent to which the leader listens to the followers and
provides encouragement to them. Here, a two-way communication exists between
the leader and the follower.
By combining the task and the relationship behaviour, we arrive at the following four different
styles of leadership which correspond with the different levels of readiness
S1 - Telling: This style is most appropriate for low follower readiness (R1). It emphasizes
high task behaviour and limited relationship behaviour.
S2 - Selling: This style is most appropriate for low to moderate follower readiness (R2). It
emphasizes high amounts of both task and relationship behaviour.
S3 - Participating: This style is most appropriate for moderate to high follower readiness
(R3). It emphasizes high amount of relationship behaviour but low amount of task
behaviour.
S4 - Delegating: This style is most appropriate for high follower readiness (R4). It
emphasizes low levels of both task and relationship behaviour.
XII. Fiedler’s Contingency Model

Fred E. Fiedler’s contingency theory of leadership effectiveness was based on studies of a
wide range of group effectiveness and concentrated on the relationship between leadership
and organizational performance.
This is one of the earliest situation-contingent leadership theories given by Fiedler. According
to him, if an organization attempts to achieve group effectiveness through leadership, then
there is a need to assess the leader according to an underlying trait, assess the situation faced
by the leader, and construct a proper match between the two.
Leader’s trait
In order to assess the attitudes of the leader, Fiedler developed the ‘least preferred co-
worker’ (LPC) scale in which the leaders are asked about the person with whom they least like
to work. The scale is a questionnaire consisting of 16 items used to reflect a leader’s
underlying disposition toward others.
The items in the LPC scale are pleasant / unpleasant, friendly / unfriendly, rejecting /
accepting, unenthusiastic / enthusiastic, tense / relaxed, cold / warm, helpful / frustrating,
cooperative / uncooperative, supportive / hostile, quarrelsome / harmonious, efficient /
inefficient, gloomy / cheerful, distant / close, boring / interesting, self-assured / hesitant,
open / guarded. Each item in the scale is given a single ranking of between one and eight
points, with eight points indicating the most favourable rating.
Friendly Unfriendly
8 7 6 5 4 3 2 1
Fiedler states that leaders with high LPC scores are relationship-oriented and the ones with
low scores are task-oriented.
The high LPC score leaders derived most satisfaction from interpersonal relationships and
therefore evaluate their least preferred co-workers in fairly favourable terms. These leaders
think about the task accomplishment only after the relationship need is well satisfied.
On the other hand, the low LPC score leaders derived satisfaction from performance of the
task and attainment of objectives and only after tasks have been accomplished, these leaders
work on establishing good social and interpersonal relationships.
Situational factor
According to Fiedler, a leader’s behaviour is dependent upon the favourability of the
leadership situation.
Three factors work together to determine how favourable a situation is to a leader. These
are:
• Leader-member relations - The degree to which the leaders is trusted and liked by the
group members, and the willingness of the group members to follow the leader’s
guidance
• Task structure - The degree to which the group’s task has been described as
structured or unstructured, has been clearly defined and the extent to which it can be
carried out by detailed instructions
• Position power - The power of the leader by virtue of the organizational position and
the degree to which the leader can exercise authority on group members in order to
comply with and accept his direction and leadership
With the help of these three variables, eight combinations of group-task situations were
constructed by Fiedler. These combinations were used to identify the style of the leader.
Correlation between leader’s LPC scores and group effectiveness
Leadership Effectiveness
The leader’s effectiveness is determined by the interaction of the leader’s style of behaviour
and the favourableness of the situational characteristics. The most favourable situation is
when leader-member relations are good, the task is highly structured, and the leader has a
strong position power.
Research on the contingency model has shown that task-oriented leaders are more effective
in highly favourable (1, 2, 3) and highly unfavourable situation (7, 8), whereas relationship-
oriented leaders are more effective in situations of intermediate favourableness (4, 5, 6).
Fiedler also suggested that leaders may act differently in different situations. Relationship-
oriented leaders generally display task-oriented behaviours under highly favourable
situations and display relationship-oriented behaviours under unfavourable intermediate
favourable situations. Similarly, task-oriented leaders frequently display task-oriented in
unfavourable or intermediate favourable situations but display relationship-oriented
behaviours in favourable situations.
This is all from us in this eBook of Leadership theories.

Source of Information & Figures: Management Study Guide
FREE Ebooks Current Affairs
Download Now Explore Now
FREE MOCK TESTS + TOPIC TESTS + SECTIONAL TESTS
For Banking, Insurance, SSC & Railways Exams

Web APP
BLOG FORUM
Your one-stop destination Interact with peers & experts,

for all exam related exchange scores
information & preparation & improve your preparation.
resources.
Explore Now Explore Now
www.OliveBoard.in
____________________________________________________________________________________________________
Subject COMMERCE
Paper No and Title 1: Management Concept and Organizational Behaviour
Module No and Title 27: Styles of Leadership
COMMERCE PAPER No. : 1 Management Concepts & Organizational

Behaviour
MODULE No. : 27 Styles of Leadership

____________________________________________________________________________________________________
TABLE OF CONTENTS
2. Introduction
3. Theories and Styles of Leadership
4. Importance of modern leadership theories
5. Summary

Behaviour

____________________________________________________________________________________________________
After studying this module, you shall be able to
 Know about the concept of leadership

 Identify the various theories of leadership
 Learn about styles of leadership
 Evaluate the importance of modern leadership theories

Behaviour

____________________________________________________________________________________________________
2. Introduction
Effective leadership is one of the most essential and intriguing part of modern organization.
Hersay and Blanchard define leadership as the process which influences group activities towards
accomplishment of organizational goals in a situational setting. The guidance of sub-ordinates
through non-authoritative methods in conjunction with formal structure can be termed as
leadership. Effective leadership makes work enriching, ensures unabated contribution by sub-
ordinates, leads to effective and efficient utilization of resources, leads to better co-ordination, co-
operation, and communication in the organization.
3. Theories and Styles of Leadership

The theories of leadership can be further subdivided into:
1. Trait theories
2. Behavioral Theories
3. Contingency Theories
We shall describe all these theories briefly.
1. Trait Theories: make a distinction between the leaders and the non-leaders. All the great
leaders who have been instrumental in shaping their nation and organization displayed
certain traits which were distinct from the others. Leaders like Mahatma Gandhi,
Margaret Thatcher, Nelson Mandela, Virgin Group CEO Richard Branson, Apple
cofounder Steve Jobs, Narayan Murthy of Infosys are distinguished leaders who were
visionary and changed the way the world worked around them. The basic point of
deliberation in trait theory is the distinguishing attributes of the leaders when compared
with the non-leaders. A significant breakthrough for trait theory researchers came with
the advent of Big Five personality framework. The Myers-Briggs Type Indicator (MBTI)
big five personality traits include:
i.) Extroversion
ii.) Agreeableness
iii.) Conscientiousness
iv.) Emotional Stability
v.) Openness to Experience
Extroversion is considered to be the most important trait of a leader, however the effectiveness of
a leader may not be assessed based on how extrovert the leader is, and it may assess the
emergence of leader among a group. Conscientiousness and openness to experience could be
linked positively with the leadership; however, agreeableness and emotional stability weren’t
very strongly related to leadership. More contemporary studies consider Emotional Intelligence
(EI) to be strongly related to effective leadership. Therefore, EI can be regarded as an essential
Behaviour

____________________________________________________________________________________________________
trait of a leader. Trait theories can be regarded as instrumental

in predicting the emergence of a leader, however, how effective
a leader would be is a different genre altogether and trait theories may not predict the
effectiveness of a leader.
2. Behavioural Theories: In the behavioural theories particular set of behaviours are

gauged and this helps in making a distinction between a leader and a non-leader. Trait
theories could provide a basis or a parameter through which a leader could be identified
and selected, however, with the help of behavioural theories, the individuals could be
trained to become a leader. This would result in the augmented supply of leaders since
now the individuals could be converted into effective leaders. Three varied behavioural
theories of leadership have been conceptualized.
Ohio State Studies: The researchers in Ohio State University initiated research on behavioural
aspect of a leader in the late 1940s. The researchers at Ohio University were looking for those
dimensions of leadership behaviour which were independent. Having assessed numerous such
dimensions they finally zeroed in on two dimensions:
a) Initiating structure refers to the leadership style in which the leader pre-assigns the
structure of work to the group members. A leader who is characterized as having high
initiating structure would assign particular work roles to his/her sub-ordinates and would
also define the standard of work performance to be adhered by the sub-ordinates.
b) Consideration refers to the concern shown by the leader towards the sub-ordinates; the
concern could be about the sub-ordinates well-being, status, satisfaction, and
contentment. Those leaders who have high consideration will show greater concern for
sub-ordinates. Concern can be with regards to comfort, well-being, status, satisfaction
etc. of the sub-ordinates.
Later reviews of the 1990’s pointed that these two factor conceptualization added little
knowledge to the concept of effective leadership, however, it was added later on that the concept
of initiating structure and consideration do have a bearing on the effective leadership.
University of Michigan Studies

University of Michigan also undertook the study on leadership effectiveness based on behavioural
characteristics almost simultaneously to the Ohio State Studies. The studies conclude that there
are two dimensions of employee-oriented and production-oriented leadership behaviour.
Employee-oriented leadership emphasized on interpersonal relations and the concept was similar
to that of consideration. Production-oriented leadership defined the task aspect of the work in
contention and parallel lines could be drawn between initiating structure and production-oriented
leadership.
The Managerial Grid

Blake and Mouton conceptualized a two-dimensional graphical description of leadership style.
This is often referred as ‘managerial grid’ or less commonly as leadership gird. The leadership
styles of ‘concern for production’ and ‘concern for people’ was placed on the two axis as
dimensions. 81 different positions could be traced to leadership styles. The grid as depicted in the
figure 3 shows nine possible positions along each axis.

Behaviour

____________________________________________________________________________________________________
The (9, 9) style is said to be the best style of leadership in which the leader is very considerate
about the people which is also called ‘Team Style’, In this high concern is given to both
production and people thus could be said to be the optimal state. In the (9, 1) style of leadership
the emphasis is towards production, i.e., produce or perish which is also termed as authority type
of leadership. In (1, 9) style of leadership the prominence is given to people i.e., the employees
rather than the production, it is also therefore called ‘Laissez Faire’ or ‘country club’ style. The
(5, 5) style of leadership middle path is employed wherein people and production both are given
importance; this is also called ‘middle of the road’ style of leadership. The managerial grid is
criticized for not providing any tangible new information as it does not clarify anything new, it
can be used however, for conceptualization of leadership styles.

Behaviour

____________________________________________________________________________________________________
3. Contingency Theories
The prediction of leadership success is a complex task; a
leadership style giving successful results today may not be successful at a future date. This
thought process led to the focus on situational influences; consequently conditions keep on
changing and so should the leadership style. Five such contingency leadership theories are being
discussed here:
I. Fiedler Model: The Fiedler contingency model was developed by Fred Fiedler which
proposes that effective performance depends upon the accurate alignment between the
style of leadership and the extent to which such control (as required by the situation) is
vested on the leader. Fiedler tried to gauge three important aspects of it. First the
identification of the natural leadership style of the leader i.e., whether the leader is
pleasant-unpleasant, efficient-inefficient, supportive-hostile, open-guarded etc., through
the least-preferred co-worker (LPC) questionnaire. It makes a distinction between the
leaders being task-oriented or relationship-oriented. It is also assumed that the leadership
style is basically fixed and in order to suit the situation either the leader or the situation
needs to be changed. Secondly, the situation which needs to be defined as identified by
Fielder and which encompasses the key situational factors as ‘leader-member relations –
confidence, respect, and trust of the follower towards his leader’, ‘task-structure – extent
to which work-roles are structured’, ‘position power – extent to which a leader exhibits
influence on important tasks such as hiring, promotions etc.’. There are eight different
contingency dimensions in which the leaders could identify themselves as shown in the
figure.
Figure 4: Fiedler Model

Behaviour

____________________________________________________________________________________________________
Thirdly, matching leaders with the situations is taken

up. After having identified the leader’s task-orientation
and/or relationship-orientation, and also after assessing the situational contingency
dimensions of the leader, the Fiedler model emphasizes on the matching of both the
above aspects to maximize the leadership effectiveness. Based on this research Fiedler
concluded that task-oriented leadership style is better placed as the leaders who are task-
oriented perform better in situations which are favourable and also in those situations
which are unfavorable too. As shown in the figure 4, task oriented leaders perform well
in favourable and unfavourable situations, however, relationship-oriented leaders perform
well in moderate control situations.
II. Cognitive Resource Theory: Fiedler added a new dimension to the earlier work, with an
associate Joe Garcia. They added that stress is an unfavourable contingency which
negatively impacts the effectiveness of a leader. This piece of research is gaining
popularity as the results of other researchers are drawing consonance. Cognitive resource
theory can be termed as the reconceptualization of the earlier theory, it says that stress is
an enemy of rationality and that if stressed a person is loaded with cognitive load.
III. Hersey and Blanchard’s Situational Theory: The propounders of situational leadership
theory (SLT) Paul Hersey and Ken Blanchard have developed a leadership model which
has gained popularity in the leadership development programs. This theory focuses on the
extent of followers readiness based on which a leader selects a right leadership style. It is
based on the premise that the ultimate leadership effectiveness is judged by the followers
who accept or reject the same. By readiness Hersey and Blanchard meant the degree to
which individuals have the ability and willingness to achieve a task. Followers are a very
important aspect of any leadership style to flourish, it ultimately zeroes down to the
acceptance forwarded by the followers. Therefore, in case the followers are unable to
unwilling to cater to a particular task in hand, the leader needs to exercise clarity and
specification in giving directions by being more task-oriented. SLT has an intuitive
appeal however, other researchers have pointed towards methodological errors in theory
formulations as SLT could not be replicated successfully elsewhere.
IV. Leader-Member Exchange Theory: This theory is based upon the premise that the
leaders tend to have favourite followers among all the followers which make the ‘in-
group’. The theory advocates that leaders establish special relationship with small group
of followers. These special few people are the most trusted and also enjoy the special
privileges meted out by the leader. The question as to how the leader chooses that in-
group is also explained in the theory, it says that based on similar attitude and personality
characteristics or higher degree of competence, in-group members are chosen upon. So
the choice of selection of the in-group lies on the leader, however, such choice is
dependent upon the characteristics displayed by the follower. As it can be seen in the
figure 5 that the in-group sub-ordinates have higher interactions with the leader,
consequently, the leader develops trust for those selected in-group sub-ordinates.
Compatibility also develops and this leads to a fruitful leader-member exchange, contrary
to this in the out-group the leader-member exchange remains formal in most of the
instances and hence the relationship continues to remain formal.

Behaviour

____________________________________________________________________________________________________
Figure : Leader-Member Exchange Theory
V. Path-Goal Theory: The essence of this theory is that it is the leader who should provide
his followers with requisite resources, information, and support so that they achieve their
goals. This theory is therefore called path-goal theory as effective leaders make the path
to achieving goals for their followers easy by reducing bottlenecks where ever required.
Path-goal theory was given by Robert House. House identified the four leadership
behaviours which the leaders employ in tandem; leaders could even display one or all the
behaviours together. The four leadership behaviours are: directive leader who gives
specific directions of how to go about a task and what are the expectations thereof;
supportive leader who shows concern for the followers; participative leader who makes a
decision after due consultation with his followers; and achievement-oriented leader who
expects his followers and sub-ordinates to be above par and perform with excellence,
they generally set the bar high and goals challenging.

Behaviour

____________________________________________________________________________________________________
Figure : The Path-Goal Theory
The contingency which could arise for all the above type of leadership styles are: for
directive leader is more effective contingent upon the fact that the situation should be
ambiguous and less structured rather than well laid out. For supportive leaders, the
employee when performing structured task is more conducive for high employee
performance and high job satisfaction than in case of unstructured work roles. Directive
leadership becomes unnecessary when the followers are experienced and they possess
high perceived ability. In case of achievement-oriented leadership when the tasks are
highly ambiguous, then it could lead to greater efforts and higher performance.
This theory therefore postulates the concept that leadership gets ineffective if the
environmental contingency factors as shown in figure 6 are not in alignment with the
leader or when the employee’s characteristics are incongruent as explained above.
Adequate testing of path-goal theory is yet to be conducted. Owing to its complexity

path-goal theory has shown mixed support from researchers. The validity of path-goal is
still not proven and hence the jury is still out.
VI. Leader-Participation Model: This model points towards a leadership theory which
provides a set criterion to identify and determine the form and quantum of participative
decision making which needs to be employed in varied situations. This model was
developed by Victor Vroom and Phillip Yetton which creates a link between leadership
behaviour and participation in decision making. This model incorporates a decision tree
providing seven possibilities whose relevance needs to be marked by a ‘yes or no’ and
five alternative leadership styles. Later on the possibilities or contingencies were
augmented to twelve. The leadership-participation model has received criticism for not

Behaviour

____________________________________________________________________________________________________
incorporating all the variables and also for the

complexity involved. The twelve contingency variables
have been mentioned in the table 1.
Table 1
Contingency variables in Leader-Participation Model (Revised)
1. Importance of the decision
2. Importance of obtaining follower commitment to the decision
3. Whether the leader has sufficient information to make a good decision
4. How well structured the problem is
5. Whether an autocratic decision would receive follower commitment
6. Whether followers buy into the organization’s goal
7. Whether there is likely to be conflict among follower over solution alternatives
8. Whether followers have the necessary information to make a good decision
9. Time constraints on the leader that may limit follower involvement
10. Whether costs to bring geographically dispersed members together is justified
11. Importance to the leader of minimizing the time it takes to make the decision
12. Importance of using participation as a tool for developing follower decision skills
4. Importance of Leadership Theories
After having seen in the chapter that how in a phase-wise manner the trait theories were replaced
by the behavioural theories and the cane the advent of the contingency theories. Though it would
be wrong to state that trait theories have been replaced completely, some of the predicaments are
always based on certain traits of a leader. However, when there is a concern for improvement of
the leadership effectiveness, researchers, academicians and practitioners do not talk much of traits
of the leader. The sticky question of leadership effectiveness and how it could be achieved is still
in the open. We have seen that each of the modern day theory and research are still being
criticised for some inconsistencies in explaining the essence of leadership. So the quest would
still go on forever. The contingency theories emerged in the pretext of further quest. The
researchers who are studying the importance of leadership effectiveness are constantly looking to
solve the ‘what leadership actually is and what it involves’ question.
Tannenbaum and Schmidt (1958) were the first to depart from the trait theories of leadership and
accepted the democratic leadership which focused on the people. They proposed a continuum of
leadership where decision making leader was at one end and worker participation enthusiast at the
other extreme. Later on as we saw there were theories which emphasised on the behavioural
aspect of leadership which could further augment the effectiveness of a leader, theories like
managerial grid were adjudged to be a very good depiction of leadership models being followed
Behaviour

____________________________________________________________________________________________________
and criticized for not giving any value additions. With the
advent of contingency theories, the researchers finally agreed
that there could not be one effective and universal style of leadership, contrary to this vivid
leadership styles could be followed at varied and difficult situations. The crux of the different
styles which we reviewed here were primarily of two types: one which emphasised more on the
people orientation or employee-oriented leadership and other which gives prime importance to
the work and production-orientation. Contingency theories signify the basis on which these styles
would be utilized; situations should be guide for employing of vivid styles of leadership by the
leaders without following one style in entirety. Effectiveness in leadership can be garnered when
the leader is educated of the dynamic situations s/he is bound to face, learning on what style
should be utilized and what would be the opportune time for doing it must be taken care of.
Leadership theories if employed well can be of great help for the practicing mangers and for all
those leaders who are at the helm of affairs in the organizations.

Behaviour

____________________________________________________________________________________________________
5. Summary
 Effective leadership makes work enriching, ensures unabated contribution by sub-
ordinates, leads to effective and efficient utilization of resources, leads to better co-
ordination, co-operation, and communication in the organization.
 The theories of leadership can be divided into: Trait theories, behavioural theories,
contingency theories.
 Trait Theories make a distinction between the leaders and the non-leaders.
 Trait theories may not predict the effectiveness of a leader.
 With the help of behavioural theories, the individuals could be trained to become a
leader.
 Ohio State Studies zeroed in on two dimensions: Initiating Structure and Consideration.
 The University of Michigan studies conclude that there are two dimensions of employee-
oriented and production-oriented leadership behaviour.
 The managerial grid propounded by Blake and Mouton is a two-dimensional graphical
description of leadership style.
 Situational influences gave birth to contingency theories of leadership which are: Fiedler
Model, Cognitive Resource Theory, Hersey and Blanchard’s Situational Theory, Leader-
Member Exchange Theory, Path-Goal Theory, Leader-Participation Model.
 Effectiveness in leadership can be garnered when the leader is educated of the dynamic
situations s/he is bound to face, learning on what style should be utilized and what would
be the opportune time for doing it must be taken care of.

Behaviour

____________________________________________________________________________________________________
Subject
Paper No and Title Paper No 1: Management Concept and Organisational

Behavior
Module No and Title Module 30 : Organisational Conflict
COMMERCE PAPER No.1: MANAGEMENT CONCEPTS AND

ORGANISATIONAL BEHAVIOUR
MODULE No.30: ORGANISATIONAL CONFLICT
____________________________________________________________________________________________________
TABLE OF CONTENTS
2. Introduction
3. Positive Effects of Conflict
3.1Release of Tension
3.2 Creativity
3.3Stimulation of Change
3.4 Identification of Weaknesses
3.5 Group Cohesiveness
4. Dysfunctions of Conflict
4.1Resignation of Personnel
4.2 Tensions
4.3Discontentment
4.4 Creation of Distrust
4.5 Goal Displacement
4.6 Weakening of Organization
5. Types of Conflict
5.1 Intrapersonal Conflict
5.2 Interpersonal Conflict
5.3 Intragroup Conflict
5.4 Inter-group Conflict
6. Source of Conflict
6.1 Incompatible goals and time horizons
6.2 Overlapping Authority
6.3 Task Interdependencies
6.4 Incompatible evaluation or reward system
6.5 Scarce Resources
6.6 Status Inconsistencies
7. Levels/ Stages of Conflict
7.1 Latent Conflict
7.2 Perceived Conflict
7.3 Felt Conflict
7.4 Manifest Conflict
7.5 Conflict Aftermath
8. Approaches to Conflict
8.1 Traditional Approach to Conflict
8.2 Modern Approach to Conflict
9. Summary

____________________________________________________________________________________________________
After studying this module, you shall be able to
 Know the meaning of organizational conflict.

 Identify the various types of organizational conflict.
 Learn what are the sources of organizational conflict.
 Evaluate the consequences of various types of organizational conflict.

____________________________________________________________________________________________________
2. Introduction
Organisation Conflict is “the result of incompatible potential relationships. The process begins
when one party perceives that another party has impeded, or will frustrate, one or more of its
concerns.” Gordon(1991)
Rahim (2000) defined conflict as a natural outcome of human interaction, which begins when one
individual perceives that his or her goals, attitudes, values, or beliefs are incongruent with those
of another individual. This incompatibility can arise within an individual, between two
individuals or between groups of individuals.
Organisational Conflict is the discord that arises when goals, interests or values of different
individuals or groups are incompatible and those people block or thwart each other’s efforts
to achieve their objectives.
Conflict is inevitable given the wide range of goals for the different stakeholder in the
organization.
3. Positive Effects of Organizational Conflict

Organization Conflict might be considered as a concept having only negative attached to it but
the truth is it has its positives too. The positive outcomes of Organizational Conflict are as
follows:
3.1 Release of Tension: Organizational Conflicts gives a chance to the members of a group to
release their tension which otherwise would have remained suppressed in the hearts of all and
lead to decrease in their efficiency.
3.2Creativity: In order to resolve the organizational conflict the members of the group display
innovation and creativity by thinking of new and alternative ideas, which otherwise would not
have come to the forefront.
3.3Stimulation of Change: Organizational Conflicts gives way to change
3.4 Identification of Weaknesses: An organizational conflict usually unveils the weaknesses in

the system,
3.5 Group Cohesiveness: Inter- group conflict promotes group cohesiveness as all members of
one group stand together against the other.
4. Dysfunctions of Organizational Conflict

The negative outcomes of Organizational conflict can paralyze the organization. Following are
the negative aspects of Organizational Conflict:

____________________________________________________________________________________________________
4.1Resignation of Personnel: Incase of interpersonal and

intra-personal conflict individuals resign from the organization
incase not a fruitful resolve is reached. This harms the organization.
4.2Tensions: Negative environment is created in the organization which leads to anxiety,

frustration among the members and that in turn lead to decrease in efficiency, productivity and
profitability. This also leads to increase in wastage, spoilage, absenteeism.
4.3 Discontentment: Individuals working in the organizations who loose in the organizational
conflict feel very discontent if the resolution is not in their favor and look for an opportunity to
settle scores with the wining party.
4.4 Creation of distrust: Once there is a conflict between two parties it becomes difficult to
create trust between the two parties. Distrust leads to negative feelings and lack of cooperation.
4.5 Goal Displacement: Employees lose sight of the organizational conflict and concentrate on
finding tactics to come out as winners in the conflict.
4.6 Weakening of Organization: If management is not able to handle the organizational conflict
it might take a disastrous shape and harm the organization. Management of organizational
conflict is important for the health of the organization. Organizational conflict leads to tension
and ultimately resignation of employees which weakens the organization.

____________________________________________________________________________________________________
5. Types of Conflict
Intergroup
Interpersonal Types of Intrapersonal

Organizational
Conflict
Intragroup
Fig 3 Types of Conflict
5.1 Intrapersonal Conflict
Conflict within an individual is thought to arise from the person’s goals or roles. This kind
of conflict arises when a person’s individual conflict does not match with the
____________________________________________________________________________________________________
organizational goals or the individual has more than one

goal and those goals do not synchronize with each other.
Role conflict arises when an individual has more than one roles and those roles are not
compatible with each other for example a mother working in an organization has an
important meeting lined up for a day and that very day her 1 year old daughter is very ill.
Now her role as an employee demands her to attend to her work and on the other hand
her role as a mother demands her to attend to her daughter.
5.2 Interpersonal Conflict
Conflict between individuals due to differences in their goals or values. Ex. Conflict between a
supervisor and a subordinate can be termed as interpersonal conflict. A supervisor wants to
increase the productivity and for that sets difficult targets for subordinates, while subordinate
does not know about the organizational targets hence feels the targets set for him are
unreasonable.
5.3 Intra-group Conflict
Conflict within a group or team. In a group when a conflict arises between the different members
of the group it can be termed as intra-group conflict.
5.4 Intergroup Conflict
Conflict between different groups in the organization are known as inter-group conflict. Ex.
Conflict between production team and marketing team.

____________________________________________________________________________________________________
6. Sources of Conflict
Fig 4 Sources of Conflict
6.1 Incompatible goals and time horizons
Different groups have differing goals and focus. An individual having two different goals which
might conflict with each other or goal of individual conflicting with organizational goal also leads
to conflict.
6.2 Overlapping Authority
Two or more managers claim authority for the same activities which leads to conflict between the
managers and workers.
6.3 Task Interdependencies
One member of a group or a group fails to finish a task that another member or group depends on,
causing the waiting worker or group to fall behind.

____________________________________________________________________________________________________
Ex. A car before finishing goes to many hands on a conveyor

belt. A performs a certain task the it comes to B, who in turn
performs other functions and so one so if A does not finish his task in time B will also not able to
finish his task in time, thus, this usually happens in case of sequential interdependencies.
6.4 Incompatible evaluation or reward system
A group is rewarded for achieving a goal, but another interdependent group is rewarded for
achieving a goal that conflicts with the first group.
6.5 Scarce Resources
Managers can come into conflict over the allocation of scare resources.
Ex. If one team is provided less resource in comparison to another team to perform the
same function it can lead to conflict.
6.6 Status Inconsistencies
Some individuals and groups have a higher organizational status than others, leading to conflict
with lower status groups.
Ex. A conflict between management and trade union member may only take place because of
difference in status.
7. Levels/ Stages of Conflict

Conflict has the following stages:
7.1 Latent Conflict: At this stage, conflict is not apparent. It occurs in the sub-conscious mind.
7.2 Perceived Conflict: At this stage, substantive or emotional differences are sensed.
7.3 Felt Conflict: At this stage conflict is felt in the form of tension .And at this stage this tension
creates motivation to act.
7.4 Manifest Conflict: Conflict can be seen in behaviors like pen aggression, apathy, sabotage,
withdrawal etc.
7.5 Conflict Aftermath: The conflict may have positive or negative aftermath. If the conflict is
resolved properly then the result will be cooperative relationships and creativity while if the
conflict is only suppressed then it can re emerge and lead to catastrophic repercussions.

____________________________________________________________________________________________________
8. Approaches to Conflict
8.1 Traditional Approach to Conflict
Classical writers view conflict as bad due to the very many adverse effects attached to it. They
believe that conflict leads to tension, negative environment and hence reduce the productivity of
the organizations. As individuals do not cooperate with each other the efficiency of the
organization reduces. Thus the traditional viewpoint of conflict considers conflict negatively.
8.2 Modern Approach to Conflict
This approach is also know an interactionist view of conflict. According to this viewpoint,
conflict in not only positive force in a group but is also necessary for a group to perform
effectively. This approach is based on the fact that peaceful group is prone to become static and
non responsive to the need of change. Conflict increases innovation and creativity. Thus, conflict
should not be totally avoided but should be kept under control.
9. Summary
 Organisational Conflict is the discord that arises when goals, interests or values of
different individuals or groups are incompatible and those people block or thwart each
other’s efforts to achieve their objectives.
 Organizational conflict has both positive and negative effects.
 Organizational Conflict can be of various types: Intrapersonal, Interpersonal, Intra-group
and Inter-group
 Organizational Conflict can be caused due to incompatible goals and time horizons,
overlapping authority, task interdependencies, incompatible evaluation or reward system,
scarce resources and status inconsistencies.
 Conflict has five stages namely, latent, perceived, felt, manifest and conflict aftermath.
 There are two approaches to conflict namely, traditional and modern.

____________________________________________________________________________________________________

____________________________________________________________________________________________________
Subject COMMERCE
Paper No and Title Paper No. 1: Management Concepts & Organizational

Behaviour
Module No and Title Module No. 31: Management of Conflict
COMMERCE Paper No. 1: Management Concepts & Organizational Behaviour

Module No. 31: Management of Conflict
____________________________________________________________________________________________________
TABLE OF CONTENTS
2. Introduction
3.Thomas and Kilmann Model of Handling Conflict
3.1 Competing
3.2 Collaborating
3.3 Avoiding
3.4 Accommodating
3.5 Compromising
4. Rahim’s Model of Conflict Resolution

4.1 Obliging
4.2 Integrating
4.3 Avoiding
4.4 Dominating
4.5 Compromising
Bargaining Strategies
4.1 Distributive Bargaining
4.2 Integrative Bargaining
5. Negotiation Process
5.1 Preparation and Planning
5.2 Definition of ground rules
5.3 Clarification and Justification
5.4 Bargaining and Problem solving
5.5 Closure and Implementation
6. Summary

____________________________________________________________________________________________________
 Know the various modes of handling conflict

 Learn the principles of negotiation
 Identify Negotiation skills and strategies
2. Introduction
Managing Conflict
As Conflict have many negative aspects attached to it, it is significant to resolve conflict. Conflict
can be handled in numerous ways. Different authors have give different modes of handling
conflict. Thomos and Kilmann suggested five modes of handling conflict:
1. Competition
2. Collaboration
3. Accommodation
4. Compromising
5. Avoidance
Rahim identified various styles of handling interpersonal conflict:
1. Obliging
2. Integrating
3. Compromising
4. Dominating
5. Avoiding
3. Thomas and Kilmann Model
This model uses two dimensions- cooperativeness (the degree to which one party
attempts to satisfy the other party’s concern) and assertiveness (the degree to which one
party attempts to satisfy his or her own concerns. The five conflict resolving techniques
are explained below with the help of two above stated dimensions.

____________________________________________________________________________________________________
ASSERTIVE
COMPETING COLLABORATING
ASSERTIVENESS COMPROMISING
UNASSERTIVE
AVOIDING ACCOMODATING
Ass
UN UNCOOPERATIVE COOPERATIVE
Cooperativeness
FIG1: TKI MODEL
3.1 COMPETING
When an individual is assertive i.e. he wants to satisfy his concern and uncooperative i.e. he is not
concerned about the other party’s concern. This approach means individuals are more concerned
about getting what they want and are not concerned with the other party’s interest.
Example: A manager wanting a subordinate to complete a project by particular date and the
subordinate wanting to extend the deadline, in this case if the Manager does not listen to the
subordinate at all and is assertive of getting the work done by a particular date, also he is not at all
cooperating with the subordinate then we will say that the manager is using a competing conflict
resolution technique.
3.2 COLLABORATING
When an individual is assertive as well as cooperative it leads to collaborating i.e. parties are
eager to resolve the issue by finding a mutually beneficial solution. This can also be called as
win-win situation as parties are not only concerned about their interest but also genuinely
concerned about the other party’s interest.

____________________________________________________________________________________________________
Example : A manager wanting a project to be completed by the

subordinate by the end of a particular month communicates to
his team that the project should be over by 25th of that particular month and the team says that
they would want to finish it by 30th ; in this case if the manager is assertive and cooperative also
he would work with the team to look for a mutually beneficial deadline and might agree to extend
the deadline to 30th of that month provided the team shows the full rough draft of the project by
28th.
3.3 AVOIDING
A person is aware that there exists a conflict but he/she withdraws from it or suppresses it by
avoiding it i.e. he/she is uncooperative as well as unassertive.
Example: A subordinate was to finish a task by a particular date but he was not able to complete
it and knowing that he will be scolded for that, he takes a long leave so that he can withdraw and
suppress the entire issue. In this case he is neither assertive nor cooperative.
3.4 ACCOMODATING
In this situation the person behaves in a cooperative but unassertive manner. Thus, hereby an
individual is not concerned about his interest rather more concerned about other party’s interest.
Example: In case where the manager gave 25th as the deadline and subordinates wanted 30th as the
deadline if the manager agrees to extend the deadline to 30th, it means manager is cooperative but
unassertive and hence follows an accommodating conflict resolution technique.
3.5 COMPROMISING
When each party to a conflict seeks to give up something resulting in a compromising

situation. The difference is that each party is willing to give up something.
Example: Incase where the manager wanted the deadline to be 25th and the team wanted
the deadline to be 30th if the manager finalizes that the deadline will be 28th it will be
called as a compromising situation.

____________________________________________________________________________________________________
4. Rahim’s Model of Conflict resolution
FIG 2: RAHIM’S MODEL OF CONFLICT RESOLUTION
4.1 Obliging: (High concern for others and low concern for self) this approach involves
satisfying the other party. This style is appropriate when you are wrong, preserving of
relationship is more important.
4.2 Integrating: (High concern for others and high concern for self) this approach is problem
solving as it involves openness and seeks to resolve the issue by information sharing. Alternatives
are discussed and concern for both parties is integrated.
4.3 Avoiding: (Low concern for others and low concern for self) this is known as withdrawal
approach. This approach is appropriate when the issue is trivial and it is better to avoid the issue
rather than confront it. In this situation neither the concern for self nor the concern for others is
important.
4.4 Dominating: (High concern for self and low concern for others) this style is aggressive style
whereby the concern for self is more important than concern for others. This style is appropriate
when decisions are to be made quickly, issue is important.

____________________________________________________________________________________________________
4.5 Compromising: (intermediate in concern for self and

others) involve give-and-take whereby both parties give up
something to make a mutually acceptable decision. This style is adequate when both parties have
equal power, when consensus cannot be reached.
5. Bargaining Strategies
Bargaining and Negotiation are terms used interchangeably and they mean that a process in which
two or more parties exchange goods or services and attempt to agree on the terms.
5.1 Distributive Bargaining
It assumes fixed pie approach i.e. there is only one pie which needs to be divided amongst both
the parties, hence, the gain that one party gets is at the expense of other party. Ex. Labour
management bargaining, labour wants more wages and management wants to pay less wages. It
requires parties to aggressively bargain. It promotes only short term relationship as only one party
is satisfied by the solution.
5.2 Integrative Bargaining
It assumes that there are more than one settlement that create a win/win solution. It is considered
a better approach as it leaves both the parties happy. This requires flexibility on account of both
the parties. It helps in developing long term relationship as parties are satisfied with each other.
This is also known as win-win approach.
Bargaining Characteristics Distributive Bargaining Integrative Bargaining

Goal Get as much bigger piece of To expand the pie so that each
pie as possible. party gets a bigger part.
Motivation Win/ loose Win/win
Focus Is to get maximum. To reach a mutually beneficial
solution.
Interest Opposed Congruent
Information sharing Low as it will allow other High as it will allow reach a
party to take advantage. fruitful solution.
Duration of relationship Short term. Long term.
TABLE1: DISTRIBUTIVE VS INTEGRATIVE BARGAINING
FIG 2: DISTRIBUTIVE BARGAINING VERSUS INTEGRATIVE BARGAINING
6. Negotiation Process

____________________________________________________________________________________________________
Negotiation process has five stages attached to it which are as

follow:
Preparation and Planning
Definition of Ground Rules

Clarification and
Justification
Bargaining and Problem
Solving
Closure and
Implementation
FIG 3: NEGOTIATION PROCESS
6.1 Preparation and Planning: Before actual negotiation a lot of ground work is to be done i.e.
both the parties should do their homework. This means information regarding what is the issue of
conflict, what are the alternative solutions, how does the issue effect other, what are its causes
and outcomes. The parties should plan what needs to be achieved and how. BATNA (BEST
ALTERNATIVE TO A NEGOTIATED AGREEMENT) parties should determine their and
other parties’ best alternative.
6.2 Definition of Ground Rules: After the preparation stage, parties should determine the
ground rules, like who will do the negotiation? Where will it take place? What time constraints?
6.3 Clarification and Justification: At this stage, each party explains his/ her point of view. A
lot of discussion takes place in this stage.
6.4 Bargaining and Problem Solving: In this stage, give and take is done. Parties will
undoubtedly have to make concession.
6.5 Closure and Implementation: This is the final stage, where the bargaining process closes
with final solution and implementation of the solutions.

____________________________________________________________________________________________________
Examples of Negotiation are buying vegetables from vegetable

vendors, doing street shopping at Sarojni market or Janpath,
Companies negotiating with the suppliers of raw materials or customers for the price of the
goods.
7. Summary
 Managing conflict is significant for an organization as it creates dysfunctions in
organizations.
 Thomas and Kilmann have given a conflict resolution model which constitutes five
modes, namely, competing, collaborating, avoiding, accommodating and compromising.
 Rahim has also given a conflict resolution model consisting of five conflict resolution
techniques namely, obliging, integrating, avoiding, dominating and compromising.
 There are two bargaining approaches, which are integrative bargaining strategy and
distributive bargaining strategy.
 Negotiation is a process when two parties exchange good or services with each other
attempt to agree on terms.
 Negotiation process has five steps, which are, preparation and planning, definition of
ground rules, clarification and justification, bargaining and problem solving and finally
closure and implementation.


Motivation &amp; Leadership Theories, Conflict Management

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Motivation &amp; Leadership Theories, Conflict Management

Uploaded by

Copyright:

Available Formats

____________________________________________________________________________________________________

Paper No and 1: Management concept and organisational behaviour

Module No and 19: Content Theories of Motivation

COMMERCE PAPER 1: Management concept and organisational behaviour

COMMERCE PAPER 1: Management concept and organisational behaviour

 Define the content theories of motivation

COMMERCE PAPER 1: Management concept and organisational behaviour

4.1 Content Theories of Motivation

Following are the content theories of motivation

 Abraham Maslow’s Need Hierarchy theory: based on needs

5.1Abraham Maslow’s Need Hierarchy theory: based on needs

COMMERCE PAPER 1: Management concept and organisational behaviour

Figure 4: Maslow’s Need Hierarchy

5.2 Herzberg’s Two – Factor Theory

1. Motivation factors (based on job context)

Motivation Factors- motivation factors referes to those factors which provide

COMMERCE PAPER 1: Management concept and organisational behaviour

Figure 5:-Motivators and Hygiene Factors

COMMERCE PAPER 1: Management concept and organisational behaviour

5.3 Douglas McGregor Theory X and Theory Y

After theory x ,McGregor developed an alterate theory Y of human behavior. This

Figure 6: Comparison of Theory x and Theory y assumptions

an important role in devising incentive schemes to motivate the employees. However

5.4 Clayton Alderfer’s ERG theory: based on needs

COMMERCE PAPER 1: Management concept and organisational behaviour

Figure: 7 ERG theory Needs

COMMERCE PAPER 1: Management concept and organisational behaviour

Table 2: Reorhanization of Maslow’s and Alderfer’s level of needs

5.5 McClelland’s learned need theory

McClleland identified three types of motivation needs, and delveoped his

1.Need for Power- desire to control others, to influence their behavior or

3.Need for achievement- desire to do something better or more efficiently

COMMERCE PAPER 1: Management concept and organisational behaviour

Figure 8 :- McClleland learned need model

 Mcclleland theory of needs is mouch simple to understand

COMMERCE PAPER 1: Management concept and organisational behaviour

5.6 Comparison of Content Theories

Figure 9:- Brief snapshot of content theories

COMMERCE PAPER 1: Management concept and organisational behaviour

 Motive is the desire the makes a man move

COMMERCE PAPER 1: Management concept and organisational behaviour

Paper No and Title 1: Management concept and Organizational behaviour

Module No and Title 20: Process Theories of Motivation

Module Tag COM_P1_M20

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

 Identify the concept of process theory of motivation.

3. Types of process theories of motivation

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

Figure: 1 Process Theories of Motivation

3.1) Vroom’s Expectancy Theory:

- this reward will be able to satisfy an important need

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

Figure 2: Relation between Expectancy, Instrumentality and Valence

Figure 3: Motivation Formula According To Vroom

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

1. Can I perform efficiently if I put in sincere efforts?

2. Will I be able to achieve the desired results by performing these tasks?

3.2 Locke’s Needs-Goal Theory

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

Figure 4: Major Findings of the theory

3. 3 Adam’s Equity Theory:

COMMERCE PAPER No.1 : MANAGEMENT CONCEPTS AND

Figure 5: Steps taken by employees to be in state of equity

Motivation & Leadership Theories, Conflict Management

Motivation & Leadership Theories, Conflict Management